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NOT TO BE PUBLISHED IN OFFICIAL REPORTS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 This opinion has not been certified for publication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 ordered 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 multiphased litigation, Robert Lalanne obtained an arbitration 

award against his sister, Michele Armanino, in her personal capacity and in her capacity 

as the managing member of a limited liability corporation. Armanino claimed an offset 

against the arbitration award and paid Lalanne the remainder. Lalanne then obtained a 

judgment confirming the arbitration award, and Armanino moved to compel 

acknowledgement of satisfaction of judgment. The trial court denied the motion. 

Lalanne’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 be renewed following this appeal.
2

I. BACKGROUND

Lalanne’s and Armanino’s parents formed several estate planning entities in which 

Lalanne, Armanino and other immediate family members hold financial interests. The 

entities include Lalanne LLC (LLC), a real property investment venture; the Lalanne 

1997 Trust; and the Lalanne Ranch Partnership. At some point, Lalanne became the 

managing member of LLC, trustee of the trust, and managing general partner of the 

partnership. In 2006 or early 2007, Armanino took over these 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 Honorable Ellen S. James (retired) under the auspices of JAMS, an 

alternative dispute resolution firm (formerly Judicial Arbitration and Mediation Services). 

In 2007, Lalanne and Armanino arrived at a partial settlement, which was memorialized 

in a signed agreement. This settlement 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 trust; Armanino to sell the home; and LLC and the trust 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 appropriate 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 

soon as reasonably practicable. . . .

“[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 $200,000, for all other 

potential claims, which shall be credited to the 1997 Trust.”

The 2008 Settlement provided that “[a]ny and all disputes concerning this 

Agreement . . . shall be mediated and, if unresolved, arbitrated at JAMS,” before 

Judge James if available.

B. Arbitration of Dispute over Section 3(b) of the 2008 Settlement

Lalanne claimed that LLC breached section 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 Section 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 award, Judge James agreed with Lalanne’s interpretation of those 

terms and ordered the parties to submit supplemental briefing on Lalanne’s 

“proportionate amount of the distributions that should have been made.” In a second 

interim award, Judge James determined the amount of Lalanne’s interest in LLC, 

permitted a temporary increase in reserves, and ordered 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 third interim award, 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 whether LLC should be permitted to offset alleged debts owed by 

Lalanne from future distributions and the fee award, including the debts listed in 

section 3(e) of the 2008 Settlement (Section 3(e)). LLC reported that Lalanne had sold 

his interest in the ranch property in 2011, and argued that Lalanne’s debts listed in 

Section 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 relating to [Lalanne’s] Section 3(e) obligations 

(which are not encompassed in this proceeding), and should not prejudice [LLC’s] ability 

to enforce those obligations.” (Some capitalization omitted.) It further argued that 

Lalanne had “long been aware that [LLC] considered [the Section 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 proceeding.” 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 payments ordered by Judge James; and that the 

offsets should not be permitted.

In her final award, Judge James expressly declined to make any ruling regarding

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 arbitration. 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 the 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 from [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 final award did not specify a dollar amount of the 
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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, shortly after the final award 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 distributions, deductions, and net payments. 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

$692,306.642

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 Lalanne 

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.

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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 judgment lien.
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other than [Section] 3(b). So whether the [Section] 3(e) deductions are appropriate was 

well beyond 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 

corrected final award (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) confirmed 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 Judgment to his counsel, 

Christopher Andreas.

D. Arbitration of Lalanne Ranch Partnership Dispute

On October 15, 2013, the Honorable Richard A. Hodge (retired) issued a final 

award in an arbitration between the Lalanne Ranch Partnership and Lalanne (the Hodge 

Award) conducted under the auspices of the American Arbitration Association. Although 

this apparently was the “pending arbitration” referenced in the James Award, the James 

Award mistakenly noted that this arbitration encompassed “[a]ll issues regarding the sale 

of the ranch and resulting obligations and appropriate set-offs.”

According to the Hodge Award, the Lalanne Ranch Partnership alleged that 

Lalanne breached his fiduciary duties as a partner when he sold his interest in ranch 
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property that was owned by the partnership. Judge Hodge agreed, finding Lalanne 

violated a partnership restriction on sales of ranch property by (1) encumbering his 

interest with a deed of trust, and (2) selling his interest to Center Street Development 

Company. Judge Hodge awarded the partnership $1.1 million in damages as well as 

attorney fees and costs. He rejected Lalanne’s “request that the [Hodge] Award provide 

instruction 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. IntraPartnership 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 Award 

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 partnership assigned 

the Hodge Judgment 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 Distribution 28,259.65

Total Distribution $69,717.164

On October 8, 2013, the day after the trial court confirmed the James Award, LLC

served Andreas with a demand for acknowledgement of satisfaction 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 Contra Costa 

County Superior Court to resolve the conflicting claims on the funds.
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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 [James Judgment],” 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 of the stay order on the sheriff.

On December 31, 2013, LLC received notices that the bank holding 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, on 

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 after hearing on January 28, 2014, the court (Hon. Ernest H. Goldsmith)

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 determine whether [LLC] distributed the proper amount and satisfied the 

judgment. The Court finds that that determination should occur after the parties resolve 

their dispute regarding [Section] 3(e).” The court denied the motion without prejudice, 

subject to renewal “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 Order automatically 

stayed enforcement of the James Judgment. A second ground was that the James 

Judgment 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 already 

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 contract.”

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 Judgment] order[ed] [LLC] to make 

a distribution and [LLC] made the distribution. The [James Judgment] 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 satisfaction 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 Court (2013) 216 Cal.App.4th 996, 1001 (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 were 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 way it could 
10

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 denied Andreas’s February 4, 2014 ex parte application 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 that 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 Order (appeal No. A140972).

II. DISCUSSION

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.4th 740, 753.) “[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 sought 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 against a judgment.” (Harrison v. Adams (1942) 

20 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 relevant circumstances, the court’s 

 

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

ruling 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 the 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 Award’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: “The reserve amount is to be 

subtracted from [the amount in specified accounts]. The $125,000 that [Lalanne] owes

LLC shall be subtracted from the remaining proportionate balance due to him.” Thus, 

before the trial court could compel acknowledgement of satisfaction of the distribution

aspect of the James Judgment, it had to and was able to determine whether the amount of 

the distribution satisfied the James Award’s requirements.7

2. Mutuality

Lalanne correctly argues that the only possible offsets to the James Judgment 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 mutuality 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 Company as creditor of Lalanne) in 

April 2013 ($53,232.54 + $310,379.19 = $363,611.73) was 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 calculation of the 

 

7 On a related issue, 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.
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underlying distribution was correct. Therefore, the trial court properly denied LLC’s 

motion to compel acknowledgement of full satisfaction of judgment.

3. Validity of Claimed Offsets

For guidance to the trial court in the 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 satisfaction 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 is that the motion to 

compel should have been granted because Judge James declined to determine whether the 

Section 3(e) debts could be offset against the April 2013 distribution. But this theory 

attempts to reallocate LLC’s burden, as the moving party, to prove the claim or defense 

underlying the motion. (See Evid. Code, § 500.) Moreover, a court may grant a motion 

to compel acknowledgement of satisfaction of judgment only if it finds the judgment has 

been satisfied in fact. (See George S. Nolte Consulting Civil Engineers, Inc. v. 

Magliocco (1979) 93 Cal.App.3d 190, 193 [discussing former § 675, subd. (a), 

predecessor statute to § 724.010, subd. (a)]; Hrimnak v. Watkins (1995) 38 Cal.App.4th 

964, 986 (conc. opn. of Davis, J.).) Here, LLC had to prove payment of a distribution 

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. The fact that 

entitlement to the offsets had not yet been resolved thus could have been a reason to deny

the motion, but not to grant it.

Should the 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 offsets. Courts generally have jurisdiction to decide offset-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 equitable 
13

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 determines that it would be inequitable to do so, and that the issue 

would be better decided in a different forum. (See 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 whether 

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 compel 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 erred in denying its motion to recall. We agree in part 

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 (rev. #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 (rev. #1, 2014).) The court has “broad discretion in determining 

whether to . . . enjoin collection of [a] judgment” pending decision of the validity of a

disputed claim for offset. (Erlich v. Superior Court, supra, 63 Cal.2d at p. 556.)

LLC based its motion to recall on three grounds.
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First, LLC argues that the writ 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 (rev. #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 trial 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 determine whether the judgment has been 

satisfied. In making this statement, the 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 and 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 offsets. Similar 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 execution. If 

LLC wanted to preserve its right to take its claimed offsets despite Lalanne’s apparent 

insolvency, it should have taken affirmative action to do so. Had LLC brought an action 

to establish its entitlement to the Section 3(e) offsets, it could have asked the court to stay 

enforcement of the James Judgment pending resolution of the offset action pursuant to 

section 918.5, thus protecting its interests. It failed to do so. In the absence of such an 

action, we see no barrier to Andreas’s enforcement of the James Judgment.

Finally, LLC argues that the writ should be recalled because of its pending appeal 

of the January 29 Order. This argument requires that we first determine whether the

appeal stayed enforcement of the James Judgment; if so, we then determine whether the 

writ should have been recalled and quashed to effect that stay. We conclude the appeal 
15

stayed enforcement 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 exceptions not relevant here, “[A]n 

appeal stays proceedings in the trial court upon the judgment or order appealed from or 

upon the matters embraced therein or affected thereby, including enforcement 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 from 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 therein or affected thereby.” (§ 916, subd. (a), italics added.) 

“ ‘ “[W]hether a matter 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 matter would have any effect on the ‘effectiveness’ of the appeal.” [Citation.] “If 

so, the proceedings are stayed; if not, the 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 (§ 917.1), 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 Court (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 of 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 were 

embraced by or affected by LLC’s appeal of the January 29 Order because collection 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. Therefore, we agree 

with LLC that appeal of the January 29 Order triggered a stay under section 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 recalling 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 sheriff had already levied funds 

in the debtor’s accounts pursuant to a writ of execution. 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 (California Commerce Bank), 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 is 
17

extinguished, 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 Revision 

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 alia, 

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. Subdivision (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, supra,

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 have 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 funds. “ ‘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 rights 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 directing 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 that the stay would remain in effect until any appeal of 
18

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 take other measures to protect their rights and interests.

III. DISPOSITION

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.)