Fin. Holding Co., LLC v. The Am. Inst. of Certified Tax Coaches, No. D072910 (D4d1 Nov. 29, 2018).
Creditor sought judgment collections discovery against Debtor’s Employer, asking for a broad swathe of business, tax, and bank records. When Employer balked, Creditor moved to compel and the trial court granted its motion. Employer appeals.
Threshold question is whether the order is appealable as an order entered after an appealable judgment under Code of Civil Procedure § 904.1(a)(2). Cases are not consistent about whether post-judgment discovery orders against third parties are appealable under that statute. Indeed, as I pointed out way back in 2013, and again last year, this very court issued contradictory opinions on the issue within six days of each other.
After reviewing the statutory text and extensive case law with its various splits of authority, the Court here sides in favor of appealability. The order against Employer was a final order as to the Employer—all that was left was for Employer to comply or refuse—which fits in within the Supreme Court’s general four-element test for appealability under § 904.1(a)(2).
On the merits, judgment collections discovery against third parties is addressed by § 708.120. It is conditioned on a showing that the third party has possession or control of property in which the debtor has an interest or owes a debt to the debtor worth more than $250. Discovery is limited to information about that property or debt. The statute does not permit “any and all documents” discovery like Creditor served on employer here. Moreover, contrary to Creditor’s arguments, various other statutes in the Code of Civil Procedure do not broaden third party collections discovery beyond what is permitted by § 708.120.
Reversed.
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