Sometimes, to help in the battle to recover a judgment, you must have a court order for your judgment debtor to appear in court to answer your questions and sometime provide copies of their documents too; by getting a subpoena form from the court. Either a lawyer or the court can issue a subpoena. The court will provide a schedule for a debtor examination (a hearing) usually at the courthouse where the judgment was obtained.
The court appearance of a judgment debtor to answer your questions is called an OEX, which stands for Order to appear for EXamination. Sometimes it is called a JDX, which stands for Judgment Debtor eXamination. With the right set of documentation, you can also attempt to compel the debtor, or third-parties to the debtor, to bring certain documents to the court for you to see. This request for documentation is called a SDT, which stands for Subpoena Duces Tecum. Note that a SDT does not command a person, it commands records.
In California, CCP 2016.070 limits what post judgment discovery one can do as per CCPs 708.010 and 1987. In California, a judgment debtor exam creates a one-year "silent lien" on all their personal property, which might make you a secured creditor if they later file for bankruptcy protection.
The following California subpoena forms cannot be used in post judgment examinations:
1) Deposition Subpoena for Production of Business Records - SUBP-010
2) Deposition Subpoena For Personal Appearance - SUBP-015
3) Deposition Subpoena For Personal Appearance and Production of Documents and Things - SUBP-020
What should you ask for? Copies of their insurance policies, bank statements, credit card statements, paycheck stubs, and anything else that might show hints about their assets.
What if you request documents, and the debtor or 3rd-party brings you two big boxes of documents, perhaps totally unorganized? Or even if it is organized, they did not bring you the copies you requested? What if the debtor claims they cannot speak or understand English? It is the debtor's responsibility to furnishing a translator, however a friend of the debtor might mistranslate and say it was a "misunderstanding". Sometimes the courts have translators on call for just this reason, so if possible, pay for a court appointed translator.
Might I suggest being careful what you ask for, and only ask for what you really need as the banks will send you a bill for their reproduction costs. For example: Do not ask for "any and all canceled checks" when you really only need "Canceled checks for the past 12 months". You might get billed for hundreds or thousands of dollars.
When the debtor, third-party, or their lawyer answers your request for documents with a box (or many boxes) of documents that are impossible to review on short notice, the dilemma speaks for itself. Ask the court for permission to simply take all such documents back to your office with you, so that you can review them and make copies as necessary, and return the documents at the next OEX date and time. Some courts will not allow this and you must either bring your own portable scanner or spend for court reporter time to ask each question you need answers for. In a few courts (you cannot count on this) you can ask the court for sanctions and arrest. You may not get them, but you will get the judgment debtor's attention. Once in a while, a judge will get angry at the debtor and have them taken away by the bailiff.
Ask the court to continue the matter for 14 days (or more, if you can get it) for this purpose. Make sure that anyone else who was subpoenaed into court by the court, that subpoena remains in effect. That way all parties (and the debtor) must return on the appointed date and time with whatever documents you asked them to bring.
Ask the other party to waive notice on the record, because 14 days might not be enough time for the clerk to get the order that continues the OEX, to the parties by US mail. (Of course, if the continuance is longer than 14 days, you will not have this problem - anything more than 15 days will be presumed to be sufficient notice of the court's order by US Mail.)
Debtor exams are not as easy or as cheap as they should be. Very often, the court will charge for a scheduled hearing, then you must (usually) pay to have the debtor served.
Having a friend serve subpoenas might be legal, but you are much better off hiring a Sheriff or a registered process server. The reason is, should the served party lie and say they were not served, the court will more likely believe a Sheriff or a registered process server.
Serving the debtor themselves, while necessary, is not usually as valuable as also serving third-parties to the debtor for several reasons:
1) The debtor may not show up in court, and the judge might issue a warrant for the debtor's arrest that you must pay for. Many debtors know that in most places, the Sheriffs make this a very low priority, and in some places, judgment debtors are never picked up, even at traffic violation stops, for civil bench warrants.
2) Judgment debtors can and do lie whenever they wish, and they often fail to bring requested documents on the first request. Many debtors know the worst that will happen is they may have to come to court again. There is a saying, "never ask a debtor a question, unless you already know the answer".
3) There are financial penalties for disobeying a court order, such as being properly served, and not showing up or doing what the court asked. Debtors already owe money and are not paying, so what is a little more owed?
The subpoenaed third-party must (based upon your information and belief) owe the debtor money, or control or have knowledge of the debtors assets.
Third-parties do not like to go to court, or to pay penalties for not doing what the court ordered. If the third-party is the debtor's spouse, kids, or parents, a unique pressure can be put on the debtor. Third-parties are usually much more sensitive to court-related threats of arrest and fines than judgment debtors are.
Third-parties can be served - but only if the debtor is also served. You must pay to have each party served, after the debtor's examination is scheduled. Third-parties could be the debtor's spouse, child, parent, landlord, neighbor, friend, employer, co-worker, bank, utility company, etc. Remember to include witness fees if required in your state.
Every state and every court is different, so it is a good idea to find an example of the forms and procedures you need at the court house, a practice guide at a law library, a judgment enforcement training book or, or the Internet.
You can get the required forms from your court or court's web site. The court clerk will tell you which days and times are available. Write or type the date and time the court gives you on the forms. Make sure that the scheduled hearing is far enough in the future that you can have your judgment debtor served.
Make sure you get all parties served, and make sure the proof of service forms are returned to the court. Find out how many copies are needed of each form, and make at least two extra copies, one for yourself and one to show the other party in court, if they forget to bring what they were served.
On the date of the hearing, show up early and check in with the court clerk, telling them your name and capacity (the judgment creditor, the assignee of record, etc.) After you and the debtor or third-party are called to appear in front of the judge, you will be sworn in, and then you will be told where to go to conduct the exam. Often the place you go is the hallway, sometimes with no chairs or tables.
All witnesses, including anyone served with an ORAP and/or SDT, are sworn in by the Court Clerk prior to going out into the hall or cafeteria. Before starting the questioning, remind them they are under oath.
When you catch a judgment debtor in an "out-and-out lie", put a star next to that question and move on. If there is a court reporter working in the court, you might be able to take the judgment debtor back into the courtroom and inform the judge you would like to ask a few questions by having the judgment debtor put into the witness box and the court reporter present. Then ask those same questions that you believe were untruthful, reminding the judgment debtor they are under oath. That transcript might later be used in a proceeding for contempt. See Lee v. Swansboro Country Property Owners Assn. 151 Cal. App. 4th 575; 59 Cal. Rptr. 3d 924; 2007. Of course, the court might be too busy to let you ask too many questions, so you might want to hire your own court reporter.
Also, the road to a contempt ruling is a game of degrees measured in several milestones along the way. You need to build a strong case for contempt over time if you have any hopes of prevailing. Your first big hurdle is to prove that the person alleged to be in contempt had actual notice of a court order, that the court order clearly directed the person to do or refrain from doing something, that is was within the power of that person to comply with the court order, and that they willfully disobeyed the court order.
Civil contempt is a quasi-criminal proceeding, subject to a higher burden of proof than in ordinary civil proceedings (beyond a reasonable doubt VS a preponderance of evidence). In small claims court, judges may not be interested in contempt, and Pro Tems and commissioners almost certainly will not be interested in deciding a contempt ruling.
If the judgment is big and the debtor is lying, you will definitely want a court reporter. You want everything recorded officially. You might want to be asking about past officers of the corporation, names, addresses, functions, etc. Have the answers before you ask the questions. Have a copy of the records from the probably have the Secretary of State.
Many Secretary Of State (SOS) office no longer offer counter service any more. They have a drop off box, and you can pay them (e.g.) $5 to fax the information to you. Make sure to include your fax number in the requestor information area. Often you can request a statement of information over the counter for viewing purposes only. They do allow individuals to take a picture of the statement of information or any other documents regardless of whether or not certified documents are ordered. Also available for viewing are the articles of incorporation on both microfiche or paper. The SOS will not let you take sample copies with you. They require that you order certified or non-certified copies and wait the 5-7 days or longer it takes to pick them up or mail them out.
At a business debtor examination, ask about the current people operating the debtor's business, asking what they do or did. Ask about bank accounts in new old and new name, as well as vehicles, credit card statements, etc. Looking for the weak link in the entity - the secretary, manager, etc. who will be the next person be brought in. And you want to let the debtor or the person appearing to know about that. Continue the hearing if necessary and make a new list of what documents they should bring.
If you have served more than one party, it is best to examine each party separately. The fact that some parties will have to wait only helps your effort to persuade the debtor to pay. If the debtor or third-party refuses to answer a question or does not bring a document you requested, ask the judge to continue the hearing to another date, to give the party another chance to bring the requested documents.
In California, personally serving a judgment debtor a debtor's exam creates a strong silent lien on all their personal property for one year. It is a good idea to identify any debtor personal property you know about on the back of the OEX form and your affidavit, as the more specific lien is always stronger than a vague one. This alone might be a very good reason to have personally serve a judgment debtor, as it might get you paid in the future.
With more crowded dockets, judges tend to be more pro-creditor, especially on the third or fourth-time that a debtor appears before them whining about "Oh, how unfair it is that I have to pay this judgment". Then, the judges may get mad at the debtor and tell them and their counsel to quit wasting the court's time, and become outright dismissive of their defenses.
A lot of lawyers and enforcers have adopted the strategy in these courts of repeatedly hauling the debtor before the court for this-or-that, but saving the really important stuff until the judge has solidly turned against the debtor, as they eventually do; and then lowering the boom. It may be a mistake to take your "best shot" against a debtor on the first couple of appearances. Wait until the judge is mad at the debtor.
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