Judge: Elaine Lu, Case: BC574481, Date: 2022-09-08 Tentative Ruling

Case Number: BC574481    Hearing Date: September 8, 2022    Dept: 26

Superior Court of California

County of Los Angeles

Department 26

Background

Plaintiff initiated the instant action on March 9, 2015.   On May 23, 2019, the Court entered an amended judgment awarding approximately $741,660.51 in damages and costs in favor of Plaintiff The 12 Tribes of Israel, U.S.A., Inc. (“Judgment Creditor”) and against Defendant Katrina Barnum (“Judgment Debtor”). 

On August 7, 2019, Judgment Debtor filed a notice of appeal.  On March 17, 2022, the Court of Appeal issued its opinion reversing the judgment as to the claim for promissory fraud and for punitive damages and otherwise affirming.  (Remittitur filed 5/24/22.) 

On July 22, 2022, Judgment Debtor filed objections to Judgment Creditor’s Subpoena Duces Tecum in large part objecting based on the third-party privacy of American Post Box, Inc.  On July 26, 2022, the Court ordered briefing on the issue and set the matter for a hearing on July 29, 2022.  (Minute Order 7/26/22.)  On July 26, 2022, the parties each filed briefing on the objections. 

On July 29, 2022, the Court overruled the privacy objection on the basis that the third-party was a corporation and thus had no privacy interest.  (Minute Order 7/29/22.)  On July 29, 2022, the Third Amended Judgment was entered. 

On August 12, 2022, Judgment Debtor filed an appeal of the court’s July 29, 2022 minute order overruling Judgment Debtors’ objections to the subpoena duces tecum. 

On August 25, 2022, Judgment Debtor filed the instant motion to stay enforcement of the July 29, 2022 minute order overruling Judgment Debtor’s objections to the subpoena duces tecum.  On August 29, 2022, Judgment Creditor filed an opposition.  On August 31, 2022, Judgment Creditor filed a reply.

Legal Standard

            “[T]he perfecting of an appeal stays proceedings in the trial court upon the judgment or order appealed from or upon the matters embraced therein or affected thereby, including enforcement of the judgment or order, but the trial court may proceed upon any other matter embraced in the action and not affected by the judgment or order.”  (CCP § 916(a).)  “The automatic stay, when it applies, arises upon a ‘duly perfected’ appeal.”  (Hearn Pacific Corp. v. Second Generation Roofing, Inc. (2016) 247 Cal.App.4th 117, 146.) 

Discussion

“[A] judgment creditor may obtain documents from a judgment debtor either by subpoena duces tecum or by a discovery request for production.”  (Li v. Yan (2016) 247 Cal.App.4th 56, 65.)  Here, Judgment Creditor issued a subpoena duces tecum to Judgment Debtor to which Judgment Debtor objected, and the Court overruled Judgment Debtor’s objection.  (Minute Order 7/29/22.) 

            Judgment Debtor filed an appeal of the Court’s July 29, 2022 order overruling Judgment Debtor’s objection.  Judgment Debtor contends that enforcement of the July 29, 2022, order is automatically stayed pending her appeal.  However, the automatic stay applies only “upon a ‘duly perfected’ appeal.”  (Hearn Pacific Corp., supra,  247 Cal.App.4th at 146.) 

Several Court of Appeal decisions have addressed the appealability of postjudgment discovery orders:

Several cases have considered whether postjudgment discovery orders are directly appealable. In Rogers v. Wilcox (1944) 62 Cal.App.2d 978, 979, the Court of Appeal held an order denying a motion to quash an order for the appearance of the judgment debtor was not appealable. The court explained: “Neither an order for appearance of a judgment debtor nor the order for his examination is in itself an end. Each is merely a step reviewable only after a final order has been made. It adjudicates no rights; it establishes no liabilities. [Citation.] It is not a special order made after final judgment though made subsequent to entry of the judgment. [Citation.] It bears no relation to the judgment. It is a separate proceeding in an original action which is a substitute for the creditor's bill. [Citation.]” (Id. at pp. 979-980.)

The postjudgment order under consideration in Roden v. AmerisourceBergen Corp. (2005) 130 Cal.App.4th 211, 214-215 (Roden), was . . . to compel production of documents under section 708.030. The Court of Appeal concluded the order was not appealable because it made no final determination of the rights and obligations of the parties. (Roden, supra, at p. 216.) The underlying judgment adjudicated the plaintiff's rights to employment benefits arising out of an employment contract but did not quantify all of those benefits, and the trial court had retained jurisdiction to resolve the remaining issues regarding benefits at a later time. (Id. at pp. 216-217.)  The postjudgment order granting the motion to compel was, therefore, “a prelude” to a later order adjudicating the amount of benefits owing. (Id. at p. 217.) Once the order adjudicating the amount of benefits had been entered, an appeal from that order might include a challenge to the discovery order. (Ibid.)

In Macaluso v. Superior Court (2013) 219 Cal.App.4th 1042, 1044–1045[162 Cal.Rptr.3d 318] (Macaluso), a panel of the Court of Appeal, Fourth District, Division One, addressed whether a postjudgment order compelling a third party to comply with a subpoena duces tecum and produce documents at a judgment debtor examination was appealable. The court concluded the order was appealable because the subpoena was issued to “a previously uninvolved third party for purely investigative purposes.” (Id. at p. 1049, 162 Cal.Rptr.3d 318.) The court distinguished Roden on the ground the order in that case “resolved disputes between parties to an ongoing lawsuit preparatory to a later ruling that would become encompassed in a later final judgment.” (Macaluso, supra, at p. 1050.) In contrast, the order at hand was not preparatory to a later determination from which the third party could appeal, but itself was a final determination that the third party had to produce certain documents in response to a subpoena. (Ibid.)

On the heels of Macaluso, a different panel of the Court of Appeal, Fourth District, Division One, reached a different conclusion in Fox Johns Lazar Pekin & Wexler, APC v. Superior Court (2013) 219 Cal.App.4th 1210[162 Cal.Rptr.3d 571] (Fox). Although Fox was an appeal from an order for a third party judgment debtor examination under section 708.120, the Court of Appeal, citing Rogers v. Wilcox, supra, 62 Cal.App.2d 978, held the order was not appealable because it was just one step in the course of a proceeding to obtain information about the judgment debtor's assets. (Fox, supra, at p. 1215.) The court found the circumstances of the matter to be extraordinary and exercised its discretion to treat the appeal as a petition for writ of mandate. (Id. at p. 1218.) As to Macaluso, the Fox court stated: “We are aware of the recent opinion from this court issued after oral argument here, wherein the court held that a third party may appeal an order overruling all of the third party's objections to the subpoena and granting a motion to compel compliance with the subpoena. [Citation.] We think the better approach here, on the unique facts before us where it is not clear if the superior court will be issuing further orders regarding the very discovery at issue, is to treat the appeal like a petition for writ of mandate.” (Fox, supra, at p. 1218, fn. 4.)

(SCC Acquisitions, Inc. v. Superior Court (2015) 243 Cal.App.4th 741, 748–750.) 

            Relying on this reasoning, the Court of Appeal has explained in a later opinion that “an order compelling the judgment debtor's attendance at an examination or to compel the debtor to produce documents can be reasonably viewed as an intermediate step to enforcing the judgment against that judgment debtor.”  (Finance Holding Co. LLC v. The American Institute of Certified Tax Coaches, Inc. (2018) 29 Cal.App.5th 663, 680.)  “Because it is rarely certain whether the trial court will be issuing further discovery orders, the better approach in general is to treat such orders as not appealable. Allowing an appeal of each discovery order will invite unnecessary delay and facilitate the concealment of assets.”  (Yolanda's, Inc. v. Kahl & Goveia Commercial Real Estate (2017) 11 Cal.App.5th 509, 513.)

            Applying this reasoning to the instant case, the examination at issue here is of the Judgment Debtor and not a third party.  Judgment Debtor’s examination and compliance with the subpoena duces tecum are viewed and shall be treated as an interlocutory order in that the examination and subpoena duces tecum constitute merely an intermediate step to enforce the judgment against Judgment Debtor.  As noted above, “[t]he automatic stay, when it applies, arises upon a ‘duly perfected’ appeal.”  (Hearn Pacific Corp., supra,  247 Cal.App.4th at 146.)  It follows that “filing a notice of appeal from [an unappealable] order does not divest the trial court of jurisdiction over the issue,” and an appeal of a nonappealable order does not automatically stay enforcement.  (Pazderka v. Caballeros Dimas Alang, Inc. (1998) 62 Cal.App.4th 658, 663.)  The Court concludes that the automatic stay is inapplicable because the July 29, 2022 order is nonappealable.

CONCLUSION AND ORDER

            Based on the foregoing, Judgment Debtor Katrina Barnum’s motion for an automatic stay of enforcement of an appealed order is DENIED.

            Pursuant to Code of Civil Procedure section 708.120(c), the lien issued by the October 14, 2021 Order for Appearance and Examination to Judgment Debtor Katrina Barnum is extended by 63 days until December 16, 2022.

            Moving Party is to give notice and file proof of service of such.

DATED:  September 8, 2022                                                 _____________________________

                                                                                                  Elaine Lu

                                                                                                  Judge of the Superior Court