Recent Court Ruling on Judgment Creditors’ Rights to Obtain Production of Documents from Judgment Debtors Over Objection of Privacy Rights of Third Parties

When seeking to enforce a civil judgment in California, judgment creditors should be aware of the tools available to them to obtain information on the assets and finances of judgment debtors. Under the Enforcement of Judgments Law (California Code of Civil Procedure Section 680.010 et sequitur), one of the miscellaneous creditors’ remedies is the judgment debtor’s examination (California Code of Civil Procedure Section 708.110).

The Judgment Debtor's Examination

The debtor’s examination allows the creditor to obtain an order for the debtor to appear in court and, if the order is personally served on the debtor at least 10 days prior to the hearing, it allows the judgment creditor to examine the judgment debtor, under oath. The scope of the examination generally includes the nature, extent and location of the judgment debtor’s assets and finances, including any real and personal property (both general and intangible). Judgment creditors should also be aware of other miscellaneous creditors’ remedies, including:

• the option to serve the debtor with written questions, also known as interrogatories (California Code of Civil Procedure Section 708.020), and
• the option to inspect and copy documents from the debtor (California Code of Civil Procedure Section 708.103).

Rights to Inspect and Copy Documents in the Debtor's Possession

In a recent case, SCC Acquisitions, Inc. v. Superior Court (2015) 243 Cal. App. 741, the court discussed judgment creditors' rights to inspect and copy documents in the debtor’s possession, even though the documents contained information about third parties. The court in SCC Acquisitions, Inc. allowed the judgment creditor to obtain discovery regarding third parties from the judgment debtor over the objection of the judgment debtor that certain of the requests violate the privacy rights of third parties. In one document request, the creditor asked for documents “sufficient to show the name and address of each business in which each of (the debtor’s) current or former officers, shareholders, and/or directors now has an interest and the nature of each such person’s interest in each such business.” The Court of Appeal found that the trial court had authority to order the judgment debtor to produce documents, and held that the discovery requests did not violate the privacy rights of the third parties.

Main Takeaway:

This ruling upholds a broad range of judgment creditors' rights, including the right to demand that any judgment debtor produce and permit the creditor to inspect and copy a document that is in the possession, custody or control of the debtor, and that the demand may be enforced to the same extent practicable and in the same manner as inspection demands in a civil action.

Michael Friedrichs is a partner at White and Bright specializing in real estate and business litigation and creditors in debt collection matters. For questions relating to this article or for assistance with debt collection issues, please contact Mr. Friedrichs at White and Bright (760-747-3200).