Discovery “After the Facts” - Post Judgment Discovery
Mark E. Bale, Esq.
Schwartz Semerdjian Cauley & Moot LLP
Most lawyers are aware of the benefits associated with pre-trial discovery in litigation. The processes and procedures originally established by the enactment of the Civil Discovery Act were intended by the Legislature to accomplish the following results: (1) to give greater assistance to the parties in ascertaining the truth and in checking and preventing perjury; (2) to provide an effective means of detecting and exposing false, fraudulent and sham claims and defenses; (3) to make available, in a simple, convenient and inexpensive way, facts which otherwise could not be proved except with great difficulty; (4) to educate the parties in advance of trial as to the real value of their claims and defenses, thereby encouraging settlements; (5) to expedite litigation; (6) to safeguard against surprise; (7) to prevent delay; (8) to simplify and narrow the issues; and, (9) to expedite and facilitate both preparation and trial. (Greyhound Corp. v. Superior Court (Clay) (1961) 56 Cal.2d 355, 376.)
Once a matter proceeds to trial, that is the end of discovery as we typically think of it. However, there are similar post-judgment discovery tools to aid in enforcement of money judgments after the facts have been discovered and used to obtain a judgment at trial. While these tools share certain procedural qualities with the traditional discovery methods of the Civil Discovery Act, there are unique aspects to these post-judgment discovery mechanisms.
Judgment Debtor’s Examination
While not technically a “discovery” tool in the true sense, a judgment debtor’s examination is similar to a deposition and is authorized by CCP §708.110, et seq. Pursuant to the statutory procedure, the judgment creditor may obtain an order requiring the judgment debtor to appear at the courthouse to furnish information that will aid in the enforcement of the money judgment. (Hooser v. Sup.Ct. (Ray) (2000) 84 Cal.App.4th 997, 1002; citing CCP §708.110(a).) At the examination, the judgment creditor has the opportunity to inquire of the judgment debtor regarding property the debtor has, or may acquire in the future, that may be available to satisfy the judgment. (Id.) A judgment debtor examination is intended to allow the judgment creditor a wide scope of inquiry concerning property and business affairs of the judgment debtor. (Id.) The purpose of the examination is “to leave no stone unturned in the search for assets which might be used to satisfy the judgment.” (Troy v. Superior Court (1986) 186 Cal.App.3d 1006, 1014.)
Despite the wide scope of inquiry permitted in a judgment debtor’s examination, there are limitations on the procedure. For example, an examinee may not be required to attend an examination before a court located outside the county in which the person resides or has a place of business unless the place of examination is less than 150 miles from the examinee's residence or business. (CCP §708.160(b).) Additionally, if a judgment creditor has examined the debtor within the previous 120 days, the judgment creditor must show “good cause” for another order of examination (by affidavit, declaration or otherwise) upon ex parte application, unless the court or local court rules require a noticed motion. (CCP §708.110(c).)
The Judicial Council has adopted a mandatory form for use as both the application for a debtor’s examination and an examination order to be served on the judgment debtor. (Form EJ-125 – Application and Order for Appearance and Examination.) The form contains the mandatory statutory warnings to the judgment debtor required by CCP §708.110(e). Once obtained, a copy of the order for appearance and examination must be personally served upon the judgment debtor at least 10 days before the examination in the same manner of service of a summons and complaint pursuant to CCP §415.10. (CCP §708.110(d).) If an order to appear for an examination is properly served and the examinee fails to appear, the court may either: (1) have the person brought before the court pursuant to a warrant and punish the person for contempt; or (2) issue an arrest warrant pursuant to CCP §1993. (CCP §708.170(a).)
If the judgment debtor is a business entity, association or trust, the judgment creditor has the option of designating in the application and order the person who is to appear at the exam on the entity's behalf. (CCP §708.150(a).) If the examination order does not designate a person to appear for the entity debtor, the entity must send one or more persons familiar with its property and debts. (CCP §708.150(c).)
Not that there would necessarily be a widespread public interest, but a judgment debtor examination is actually open to the public. (Jogani v. Jogani (2006) 141 Cal.App.4th 158, 176.) This also entitles the judgment creditor and/or representatives to attend the examination which can assist the examining the attorney in pursuing areas of inquiry. It is important for the examining attorney to be well prepared for the judgment debtor’s examination. Also, if going through the time, effort and expense to take a judgment debtor’s examination, it is important to arrange for the attendance of a court reporter at the examination to transcribe the proceedings as the court will not provide a reporter.
In a more traditional discovery procedure, a judgment creditor may propound written interrogatories to the judgment debtor requesting information to aid in enforcement of the judgment in the same manner and in the same time provided in the Civil Discovery Act. (CCP §708.020(a).) Interrogatories may be enforced in the same manner as interrogatories in a civil action. (CCP §708.020(c).) On the upside, interrogatories are cheaper that a judgment debtor’s examination. However, the problem with interrogatories is that judgment debtors may choose to ignore and not answer the interrogatories and then the judgment creditor is forced to pursue court remedies to: (1) compel compliance - which can be quite time consuming; and (2) seek sanctions - which may not be collectible.
Similar to the restrictions on frequency of judgment debtor examinations, post-judgment interrogatories may not be served within 120 days after the judgment debtor has responded to previous post-judgment interrogatories or within 120 days of a judgment debtor’s examination and if propounded within that time frame, a judgment debtor need not respond. (CCP §708.020(b).)
While post-judgment interrogatories are limited to a maximum of 35 as to any set of interrogatories (similar to the limit set forth in CCP §2030.030)(b)) the limit does not apply cumulatively to interrogatories propounded to a judgment creditor. (CCP §708.020(d).) In other words, a judgment creditor may propound 35 interrogatories to the judgment debtor and then 120 days later propound an additional 35 interrogatories without running afoul of the limitations of the Civil Discovery Act. (See Law Revision Commission Comments to CCP §708.020.)
A judgment creditor may also serve a demand for production and inspection of documents to aid in enforcement of a money judgment. (CCP §708.030(a).) Such a demand permits the judgment creditor to inspect and copy documents in the possession, custody or control of the judgment debtor in the same manner and in the same time provided in the Civil Discovery Act commencing with CCP §2031.010. (Id.) As with post-judgment interrogatories, post-judgment inspection demands may be enforced in the same manner as inspection demands in a civil action. (CCP §708.030(c).)
Through post-judgment inspection demands, the judgment creditor may obtain documents disclosing the debtor's assets or earnings (e.g., tax returns, financial statements, payroll stubs, real property deeds, stock certificates, passbooks, deposit account statements, bonds, trust deeds, automobile ownership certificates (“pink slips”), promissory notes, etc.). (See Lee v. Swansboro Country Property Owners Ass'n (2007) 151 Cal.App.4th 575, 581.) An inspection demand is cheaper than a judgment debtor’s examination, requires less preparation time, and it can also be used to “set up” a later examination of the judgment debtor. (Id.)
Unlike interrogatories, there is no limit on the number of demands that can be served and inspection demands may be served on the judgment debtor any time while the judgment is enforceable. However, as with post-judgment interrogatories, post-judgment inspection demands may not be propounded within 120 days after the judgment debtor was examined by the judgment creditor at a debtor’s examination, or within 120 days of when the judgment debtor responded to a set of post-judgment interrogatories, or within 120 days of the judgment debtor responding to a previous post-judgment inspection demand. (CCP §708.030(b).) The judgment debtor need not respond to inspection demand(s) violating any of these limitations. (Id.)
Again, as with post-judgment interrogatories, the downside is that a judgment debtor may not respond to the inspection demands requiring a potentially lengthy period to obtain a court order compelling compliance and/or an award of sanctions for non-compliance which may not be collectible.
Traditional discovery used to unearth the facts of a case typically ends before trial at the time of the discovery cut-off. But remember, the days of discovery may not be done if your client obtains a money judgment and engages your assistance to enforce that judgment “after the facts.”