Subpoenaing Third Parties for Docs to Use in a Judgment Debtor Exam

Shrewsbury Mgm’t v. Superior Court, No. H043166 (D6 Mar. 11, 2019)

This case, which concerns judgment debtor discovery, is basically the same as the 2017 decision in Yolanda’s, except that it applies to documents instead of testimony. 

Code of Civil Procedure § 708.110 permits a creditor to take an examination of a judgment debtor. The examination permits the creditor “to leave no stone unturned in the search for assets which might be used to satisfy the judgment.” 

On the other hand, § 708.120 permits third party examinations of relatively limited scope. The creditor can inquire about assets that belong to the debtor that are possessed by the third party. But an exam under § 708.110 can’t exceed that scope. And then, if third party is shown to possess the debtor’s property, the creditor can immediately move for a charging order to apply those assets to the satisfaction of the judgment.

Section § 708.130, however, affords an additional discovery right that is both broader and narrower. It’s broader in that witnesses can be required to appear and testify, in the same manner as if the proceeding were trial. On the other hand, it doesn’t have any turnover right attached. 

Here, Creditor was taking a debtor exam. In connection with that, it issued a subpoena duces tecum to a Bank for documents related to accounts for entities over which the debtor had signing authority. Harmonizing the statutes, the Court of Appeal holds that a third party subpoena duces tecum in enforceable so long as it is “tethered to” relevant subjects of the debtor’s exam. 

Reversed.