Judge: Linda S. Marks, Case: 2014-00712537, Date: 2022-11-28 Tentative Ruling

Motion to Compel Production filed by EBF Property Management, Inc. set on 10/24/22

EBF Property Management, Inc. (“EBF”) moves for an order for the production of documents within ten days in response to subpoenas served on Kimberly Wetzel and Sylvia Wetzel pursuant to Code of Civil Procedure section 708.130.

An initial matter, this is technically two motions: one to compel the judgment debtor, Kimberly Wetzel, to comply with a subpoena, and one to compel a third party, Sylvia Wetzel, to comply with a subpoena. This ruling will encompass both matters.

Motion to Compel as to Kimberly Wetzel

There is no opposition brought on behalf of Kimberly Wetzel. However, Sylvia Wetzel has filed an opposition, based in part, on privacy.

“The right of privacy protects against the unwarranted, compelled disclosure of private or personal information and ‘extends to one’s confidential financial affairs as well as to the details of one’s personal life.’ [Citation.]” (SCC Acquisitions, Inc. v. Superior Court (2015) 243 CalApp.4th 741, 754.) The zone of privacy protected by Article I, Section 1 of the California Constitution encompasses personal financial information, but does not provide absolute protection. (Ibid.) “ ‘[C]ourts must balance the rights of civil litigants to discovery relevant facts against the privacy interests of persons subject to discovery.’ [Citation.] ‘In determining whether disclosure is required, the court must indulge in a “careful balancing” of the right of a civil litigant to discovery facts, on the one hand, and the right of third parties to maintain reasonable privacy regarding their sensitive personal affairs, on the other. [Citation.] The court must consider the purpose of the information sought, the effect of that disclosure will have on the affected persons and parties, the nature of the objections urged by the party resisting disclosure and availability of alternative, less intrusive means for obtaining the requested information. [Citation.] Based on an application of these factors, the more sensitive the nature of the personal information that is sought to be discovered, the more substantial the showing of the need for the discovery that will be required before disclosure will be permitted. [Citations.]’ [Citation.]” (Id. at pp. 754-755.) “Obtaining information to collect on a judgment is ‘a valid significant interest.’ [Citation.]” (Id. at p. 755.) In finding that the trial court’s order granting a judgment creditor’s motion to compel responses to requests for production propounded against a judgment debtor was correct to which an objection of third party privacy was asserted on the basis that the requests sought documents of third parties, the Court concluded that such discovery could be had stating, “[h]aving been assigned a substantial money judgment against SCC, Western has the right to discover facts about the nature and location of assets to make that judgment more than scrap of paper. The information sought by Western’s discovery is financial in nature and a protective order could be issued, if necessary to safeguard privacy rights of third parties. SCC has not identified other sources from which the information sought by the discovery can be obtained.” (Id. at pp. 744, 746-747, 755.)

Here, trust-related documents may be financial in nature, however, EBF has a right to discover facts about the nature and location of assets, and obtaining information to collect a judgment is a valid significant interest.

Motion As to Third Party, Sylvia Wetzel

EBF does not identify the subpoena or document demand(s) at issue. However, the document demand for production on 10/3/22, directed to Sylvia Wetzel consists of one demand as follows:

All documents regarding any trust in which Kimberly Wetzel is, or previously was, a beneficiary, trustee, or settlor. (Ex. E to Wallin Decl.)

Probate Code section 15306.5 does not concern document demands on a third party in judgment enforcement proceedings, which is at issue here. Probate Code section 15306.5 states, in part, “[n]otwithstanding a restraint on transfer of the beneficiary’s interest in the trust under Section 15300 or 15301, and subject to the limitations of this section, upon a judgment creditor’s petition under Section 709.010 of the Code of Civil Procedure, the court may make an order directing the trustee to satisfy all or part of the judgment out of the payments to which the beneficiary under the trust instrument or that the trustee, in the exercise of the trustee’s discretion, has determined or determines in the future to pay to the beneficiary.” (Probate Code § 15306.5(a).) EBF is not making a petition under Code of Civil Procedure section 709.010.

The Court notes that there is a conflict in the Courts of Appeal as to what section governs a creditor’s right to obtain information from a third party in judgment collection proceedings. The Fourth District Court of Appeal has held that Code of Civil Procedure section 708.120 governs a creditor’s right to obtain information from a third party in judgment collection proceedings, whereas, the Sixth District Court of Appeal has held that a creditor may proceed under Code of Civil Procedure section 708.110 or 708.120.

The Fourth District Court of Appeal in Finance Holding Co. LLC v. The American Institute of Certified Tax Coaches, Inc. (2018) 29 Cal.App.5th 663, involved a judgment creditor seeking documents issued to the employer of the judgment debtor in judgment enforcement proceedings and a trial court order compelling the employer to produce documents unrelated to the judgment debtor and/or its debts owed to her. (Finance Holding Co. LLC v. The American Institute of Certified Tax Coaches, Inc. (2018) 29 Cal.App.5th 663, 667, 681 (“Finance Holding”).) The Fourth District found that “Section 708.120 governs a creditor’s right to obtain information from a third party in judgment collection proceedings,” (Id. at p. 681.) “Under section 708.120, a creditor is entitled to examine a third party if it convinces the court that the ‘third person has possession or control of property in which the judgment debtor has an interest or is indebted to the judgment debtor.’ ” (Id. at p. 682.) “Under its plain meaning, this statutory language provides the trial court with authority to permit a creditor to seek information regarding the existence of the debtor’s property in the third party’s possession and/or a debt owed to the debtor. A third party document subpoena must therefore be limited to ‘confirm[ing] the existence of the subject property [and/or] debt.’ [Citation.]” (Ibid.) The Court of Appeal found that the order compelling production thus exceed the statute’s scope, and found that the judgment creditor’s reliance on other statutes and/or the court’s equitable authority such as under Code of Civil Procedure section 708.130, to support that the court’s order was appropriate was misplaced. (Id. at pp. 682-683.) The Court of Appeal stated: “[u]nder settled statutory interpretation principles, section 708.130 does not expand a court’s powers to order third party discovery under section 708.120. [Citation.] Otherwise, there would have been no need for section 708.120. Because section 708.130 is a general statute pertaining to the conduct of a debtor’s examination, and section 708.120 provides specific rules regarding the scope of discovery against a third party in judgment enforcement proceedings, section 708.120 provides specific rules regarding the scope of discovery against a third party in judgment enforcement proceedings, section 708.120 governs the court’s discovery order here. [Citations.]” (Id. at p. 683.)

However, the Sixth District Court of Appeal in Shrewsbury Management, Inc. v. Superior Court (2019) 32 Cal.App.5th 1213, stated: “[T]o the extent that Finance Holding’s language suggests that the scope of inquiry with respect to a third party is always limited by that delineated in section 708.120, because section 708.120 is a purportedly more specific statute that controls over section 708.130, we respectfully disagree. [Citation.] The principal that a specific statute controls over a more general statute is applicable only when the two statutes cannot be reconciled. [Citation.] Section 708.120 authorizes examinations of a specific subset of third party witnesses—those who have possession or control of property in which the judgment debtor has an interest or are indebted to the judgment debtor in an amount exceeding $ 250 [citation]—and provides for a lien . . . . Section 708.130, on the other hand, simply permits judgment creditors to call witnesses with relevant information in examination proceedings—either a proceeding under section 708.110 or section 780.120—without creating any liens on property in the witness’s possession or control.” (Shrewsbury Management, Inc. v. Superior Court (2019) 32 Cal.App.5th 1213, 1227–1228 (“Shrewsbury”).)

The Sixth District Court of Appeal in Shrewsbury provides that a subpoena duces tecum may be served on a party to compel production of documents at trial, and “in the context of postjudgment enforcement proceedings, ‘the use of a subpoena duces tecum to discover and inspect relevant documents is an accepted practice.’ [Citations.] (Shrewsbury, supra, 32 Cal.App.5th at pp. 1224-1225.) “[S]ince the scope of a judgment debtor examination under section 708.110 has been interpreted to permit a wide scope of inquiry into the judgment debtor’s finances [citation], it follows that the scope of a subpoena duces tecum served on a third party that is tethered to the examination of the judgment debtor under section 708.110 must be similarly broad.” (Id. at p. 1225.) Thus, “when a subpoena duces tecum is tethered to an examination under section 708.110, the scope of discoverable documents must be broadly construed to include matters relating to the ‘ “property and business affairs of the judgment debtor” ’ [citation], and is not limited by section 708.120.” (Id. at p. 1228.)

Notwithstanding the conflict, there appears to be a sufficient showing that Kimberly may have an interest in Sylvia’s Trust over which Sylvia has control to permit EBF to seek information regarding the existence of Kimberly Wetzel’s interest in the Trust under Code of Civil Procedure sections 708.110 and 708.120.

The request is limited to only documents “regarding any trust in which Kimberly Wetzel is, or previously was, a beneficiary, trustee, or settlor.” (Ex. E to Wallin Decl.) Thus, it seeks to confirm the existence of Kimberly’s interest in the Trust, and is related to Kimberly Wetzel’s possible interests in property such that it would be authorized under Code of Civil Procedure section 708.120. The opposition and declarations by Kimberly Wetzel and Sylvia Wetzel indicate that Kimberly Wetzel at least once did have an interest as a beneficiary of the Trust.

Further, as set forth above, Sylvia Wetzel’s privacy interest does not outweigh disclosure in this case.

Tentative Ruling: Plaintiff’s Motion to Compel is GRANTED, subject to a protective order addressing the financial privacy interests of Sylvia Wetzel. EBF, Kimberly Wetzel and Sylvia Wetzel are to submit a proposed stipulated protective order governing the production of documents regarding any trust in which Kimberly Wetzel is, or previously was, a beneficiary, trustee, or settlor. Said stipulated protective order to be submitted within thirty (30) days. Documents to be produced within thirty days (30) days from the Court’s approval of the proposed stipulated protective order.

The Court GRANTS EBF’s Request for Judicial Notice pursuant to Evidence Code sections 452(d) and (h), but declines to take judicial notice of hearsay statements contained within the documents.

EBF to give notice.