DEBTOR EXAMS

Examination of Judgment Debtor and Third Parties: An examination of a judgment debtor or third party is the postjudgment equivalent of a deposition. An examination can be used to identify property in the possession or control of the judgment debtor or a third person (e.g., a nondebtor spouse), to learn about property the debtor may obtain in the future, and to require the debtor or third person to turn over property to the levying officer. Upon service of an examination order (below), the judgment debtor must appear in court (or before a referee) "to furnish information to aid in enforcement of the money judgment." [Ca Civ Pro - 708.110(a)] A third person (e.g., a nondebtor spouse) may be ordered to appear for examination upon the judgment creditor's application showing to the court's satisfaction that the third person is in possession or control of property in which the judgment debtor has an interest or is indebted to the debtor for more than $250. [Ca Civ Pro - 708.120] In addition, any person with knowledge leading to enforcement of the judgment (e.g., debtor's bookkeeper, accountant or nondebtor spouse) can be subpoenaed to testify before the court or a referee in an examination proceeding in the same manner as a trial witness. [See Ca Civ Pro -- 708.130, 708.140]

If an order to appear for an examination is properly served (i.e., personally served by a sheriff, marshal, person appointed by the court or a registered process server) and the examinee fails to appear, the court may issue an arrest warrant requiring the examinee to appear in court and explain the nonappearance. [Ca Civ Pro - 708.170(a)(1)] Upon a finding that the examinee did not have good cause for failing to appear, the court must award the judgment creditor reasonable attorney fees incurred for the examination proceeding. (Attorney fees awarded against the judgment debtor are added to the principal amount of the judgment.) [Ca Civ Pro - 708.170(a)(2)]

At the conclusion of the examination, the court may order that a judgment debtor's interest in nonexempt property be applied to satisfy the judgment. Such a "turnover order" is authorized both where the debtor is examined and where an examination of a third person reveals that the person possesses or controls property in which the debtor has an interest or owes over $250 to the debtor. [Ca Civ Pro - 708.205(a)] The court may order the examinee to deliver the property or funds to the levying officer. Turnover orders are enforceable by contempt (Ca Civ Pro -- 1209-1222). [See Comment to Ca Civ Pro - 708.205]

The Judgment Debtors Exam:-Grill the Bastard !

Every object the JD carries into the examination tells a story that can pay your judgment, so don't be afraid to ask to see those objects. Wallets, purses, cell phones, watches, pagers. I ask, "What kind of watch is that?" followed by, "Is it yours?" (This question always elicits an indignant reply, "Of course, it's mine," to which I reply, "Would you please remove it from your wrist and hand it to the bailiff." (If he says no -- I love when this happens -- I ask the judge, "Your Honor, would you please instruct the JD to remove his watch and hand it to the bailiff." The judge orders it. I then ask the bailiff to hand it to me, and the bailiff ALWAYS complies. I describe the watch to the judge and ask the judge to order that it be turned it over to the Sheriff to be auctioned off. Once that happens, the JD gets the message and the OEX becomes much more productive. This also works real well with keys on a key chain. I ask the JD, "What does this key open?" If he says, "I don't know," or "I don't remember," I say, "Then, you won't mind if I remove it from your key chain and keep it." When he objects -- and they ALWAYS do -- I then say, "So you DO know what it opens? Please answer the question. What does this key open?"

Don't be afraid to ask about the JD's spouse -- how long they've been married; what is her full, legal name; where does she work; what does she do; etc. This is "fair game" in an examination. You have the legal right to levy on the earnings of a nondebtor spouse (with a court order) in order to satisfy the debtor spouse's judgment (with few exceptions.) The JD cannot withhold this information at the examination. There's a maximum 5-day "contempt of court" sentence that the court can impose for willful refusal to divulge information, or until the JD *does* divulge it. Don't be afraid to ask the judge, "Your Honor, would the Court please inform XX concerning the penalty for willful refusal to divulge information in an examination?"

Dealing with Mr. Objection (Opposing Counsel)

As the judgment creditor you are entitled to the "widest scope for inquiry concerning property and business affairs of the debtor." Young v. Keele (1987) 188 Cal. App. 3d 1090, 1093. Additionally, in judgment recovery proceedings, the Judgment Creditor's function is "to leave no stone unturned in the search for assets which might be used to satisfy the judgment." Troy v. Sup. Ct. (Rourke)(1986) 186 Cal. App. 3d 1006, 1014. Thus, Judgment Debtors are not entitled to privacy nor to protect their financial records. Thus, the requests for "payments" from Judgment Debtors or third parties for their benefit are proper.

See Troy v. Sup. Ct. (Rourke)

(1986) 186 CA3d 1006, 1014.

Objections Based Upon Relevance. [6] Troy also objected to a number of
proposed questions designed to elicit information about his children.

Troy alleges that such questions are irrelevant to a search for assets, and the
only relevant inquiry in this area (which was not made) is whether Troy had
transferred assets to his children. In fact, Troy was asked whether he had
transferred property to anyone within the last 10 years, a query which,
while posed in general terms, would presumably include Troy's children.
{Page 186 Cal.App.3d 1014}.

[Young v. Keele (1987) 188 CA3d 1090, 1093, 233 CR 850, 852.]

In a Code of Civil Procedure section 708.110 (formerly section 714) hearing,
the examination is intended to be summary and factual according the widest
scope for inquiry concerning property and business affairs of the debtor;
the object of the proceedings being to compel the judgment debtor to give
information concerning his property. (8 Witkin, Cal. Procedure (3d ed. 1985)
Enforcement of Judgment, section 274, p. 238, citing Coleman v. Galvin
(1947) 78 Cal.App.2d 313 [177 Cal.Rptr. 606].) Public policy does not
support a judgment debtor's attempt to be less than candid about his assets
and ability to pay the judgment especially when a definite legislative
policy has established a procedure for aiding judgment creditors collection
of their judgments.