12th Jul 2019
An insurer after a judgment-creditor obtains judgment against the insured may deny coverage. Pending an action on a judgment against the insurer, the judgment-creditor may seek to pursue a remedy of pursuing the insured’s assets. A judgment-creditor may apply for a court order requiring the judgment-debtor to appear in court or before a referee to furnish information or aid in the enforcement of a money judgment [CCP § 708.110(a)] 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. Service of the order for an examination of the judgment-debtor creates a lien on the personal property of the judgment-debtor for a period of one year from the date of the order unless extended or sooner terminated by the court [CCP § 708.110(d); Shrewsbury Management v. Superior Court (2019) 32 Cal. App. 5th 1213, 1223]
Court order requiring a third party to appear
Under CCP § 708.120, a judgment-creditor may apply for a court order requiring a third party to appear before a court or referee if the judgment- creditor can prove by affidavit or otherwise to the satisfaction of the court that the third party has possession or control of property in which the judgment-debtor has an interest or is indebted to the judgment-debtor in an amount exceeding $250. [CCP § 708.120(a)] The purpose of the examination is for the third party to answer questions regarding the property of the judgment-debtor it possesses or the debt it owes to the judgment-debtor. [Shrewsbury Management v. Superior Court (2019) 32 Cal. App. 5th 1213, 1223-1224] The scope of the examination of a third party is limited to the above subjects and that an examination under CCP § 708.120 does not permit a more expansive scope of inquiry. [Shrewsbury Management v. Superior Court (2019) 32 Cal. App. 5th 1213, 1224].
At the conclusion of the examination of a third party, the court may order the judgment debtor’s interest in the property in the possession or under the control of a third party, or a debt owed by the third person to the judgment debtor to be applied towards the satisfaction of the money judgment if the property is not exempt from enforcement of a money judgment. [CCP § 708.205(a); People v. Pereira (1989) 207 Cal. App. 3d 1057, 1066].
Lastly, under CCP § 708.130(a), witnesses may be required to appear and testify before the court or referee in an examination proceeding under CCP § 708.120 in the same manner as upon the trial of an issue. In other words, under the statutory scheme to enforce judgments, the examination of the judgment-debtor or a third party under §§ 708.110 or 708.120 is similar to a trial in which witnesses are required to appear and to testify in the same manner as upon the trial of an issue. [Shrewsbury Management v. Superior Court (2019) 32 Cal. App. 5th 1213, 1224]
Subpoena duces tecum served upon a third party bank
Where a subpoena duces tecum is issued in connection with the examination of a third party under CCP § 708.120, the subpoena duces tecum being “tethered to” the judgment debtor’s examination, is given a wide scope of inquiry regarding the property and business affairs of the judgment-Shrewsbdebtor. [32 Cal. App. 5th 1213, 1226-1217] A subpoena duces tecum is tethered to an examination under CCP § 708.110 when it includes matters relating to the “property and business affairs of the judgment debtor”. [32 Cal. App. 5th 1213, 1228]
The requirements for issuance of a subpoena duces tecum is addressed under CCP § 1987.5 [Shrewsbury, 32 Cal. App. 5th 1213, fn. 2]
References in bold are to Mr. Cornblum’s text CALIFORNIA INSURANCE LAW DICTIONARY AND DESK REFERENCE, 2018 Edition, published by ThomsonReuters (1-800-344-5008 to order 3-Volume text).