Monday, September 23, 2013

Well, this Isn't Going to Make Collections Any Easier...

Macaluso v. Superior Court, No. D063325 (D4d1 Sept. 18, 2013)

The court of appeal holds that an order compelling compliance with a third-party subpoena in post-judgment debt collections proceedings is an appealable order under Code of Civil Procedure § 904.1. 

Lennar is trying to collect on a $50 million judgment against Marsh. Marsh says he’s insolvent but Lennar thinks otherwise. Macaluso is an attorney who had previously loaned Marsh money to pursue the underlying litigation, gave him spending money, and represented him in various lawsuits. In discovery, under the Enforcement of Judgments Act, Lennar subpoenaed Marsh and his two entities for both documents and testimony. Marsh showed up at the deposition, but refused to produce any documents, was generally hostile and evasive, and ducked out at the lunch break claiming “illness.”

Lennar successfully moved to compel, and Macaluso timely appealed the order. After Macaluso refused to comply, on the grounds that his appeal stayed enforcement of the discovery order, Lennar moved to enforce the order, and the court issued an order to show cause re contempt. Macaluso sought writ relief.

The issue presented was whether the original discovery order was appealable. If so, Macaluso’s appeal effectively stayed the proceedings, and the OSC was issued without jurisdiction. Code of Civil Procedure § 904.1(a)(2) provides that “[a]n appeal . . . may be taken from . . . an order made after a judgment.” But in 1993, the Supreme Court read a gloss onto the statute, holding that, not withstanding its literal reading, not every post-judgment order is immediately appealable. See Lakin v. Watkins Assoc. Indus., 6 Cal. 4th 644, 651 (1993). Under Lakin, a post-judgment order is appealable only when (1) the order and appeal are separate and distinct from issues in the appeal of the judgment, and (2) the order affects or relates to the judgment and its enforcement. Lakin further noted that “postjudgment orders making a final determination of rights or obligations of parties” have been held appealable “even though they did not necessarily add to or subtract from the judgment.”

After reviewing several post-Lakin cases, the court of appeal determined that a final order on enforceability of third-party subpoenas in judgment enforcement proceedings was, in fact, an appealable order. Thus, Macaluso’s notice of appeal was proper and had the effect of wresting jurisdiction from the superior court the underlying action.

Writ granted. Superior court ordered to vacate its order to show cause.

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