Brown v. Sperber-Porter

          ORDER

          Bridget S. Bade United States Magistrate Judge

         Petitioners/Judgment Creditors Rickman Brown, Jeff Ross, Evans, Sholz, Williams & Warncke LLC, and Ross and Orenstein LLC f/k/a Ross, Orenstein & Baudry LLC (“Petitioners”) have filed a Motion to Compel Compliance with Subpoena (Eva Sperber-Porter). (Doc. 287.) The motion pertains to a subpoena to testify at a deposition that was served on Eva Sperber-Porter (“Sperber-Porter”) on April 25, 2018. (Id. at 3; Doc. 283.) Sperber-Porter objected to the subpoena. (Doc. 273.)

         Petitioners request an order that (a) overrules Sperber-Porter's objections to the subpoena, (b) grants their motion, (c) instructs Sperber-Porter to produce the requested documents within fourteen days of the Court's order, and (d) instructs Sperber-Porter to appear for a deposition at a mutually convenient date and time, between seven and fourteen days after the production of the documents. (Id.) The motion is fully briefed.^[1](Docs. 292, 294.) As set forth below, the Court grants Petitioners' motion.

         1. Background

         On December 16, 2016, the Court entered a Judgment in this action in favor of Petitioners and against Respondents Eva Sperber-Porter, Baseline & Val Vista Associates, LP, Litchfield Road Associates, LP, Joseph Baldino and Helen Baldino, husband and wife, the Baldino Family Revocable Living Trust, and the Meridian Financial Corporation Profit Sharing and Retirement Trust (collectively, the “Respondents”). (Doc. 33.) On April 20, 2018, the Baldinos filed a Motion for Relief from Judgment Pursuant to Rule 60(b)(5).^[2] (Doc. 260.) In that motion, the Baldinos argued that the Judgment had been paid in full and that they were entitled to a satisfaction of the Judgment. (Id.) Sperber-Porter joined in that motion. (Doc. 272.) On May 11, 2018, Sperber-Porter filed a Motion to Release Judgment Lien. (Doc. 276.) On August 2, 2018, the Court denied the motion for relief from judgment and the motion to release judgment lien.^[3] (Doc. 313.)

         On February 16, 2018, Petitioners obtained an amended writ of general execution (the “amended writ”) issued against the Sperber-Porter Judgment Debtors that calculated damages after interest and recoveries already received.^[4] (Doc. 313 at 2, Doc. 234.) On April 25, 2018, Petitioners served Sperber-Porter with a subpoena to testify at a deposition. (Doc. 273, Ex. 1; Doc. 283.) The subpoena also directed Sperber-Porter to produce numerous documents. (Doc. 283; Doc. 273, Ex. 1 at 3-7.) On May 9, 2018, Sperber-Porter filed an objection to the subpoena. (Doc. 273.) In her objection, Sperber-Porter argued that (1) the subpoena is moot because the Judgment had been satisfied, and (2) the subpoena is overly broad because it seeks documents and testimony relating to community assets. (Id. at 3-5.) Sperber-Porter also argued that, if she is required to comply with the subpoena, the Court should enter a protective order. (Id. at 5-6.) Petitioners filed a motion to compel Sperber-Porter to comply with the subpoena, Sperber-Porter filed a response, and Petitioners filed a reply. (Docs. 287, 292, 294.)

         II. Motion to Compel

         A. Mootness

         In her objection to the subpoena and in response to the motion to compel, Sperber-Porter argued that the subpoena is moot because Respondents have paid the full amount of the “non-contingent portion” of the Judgment. (Doc. 273 at 3; Doc. 292 at 2-6.) The Court, however, rejected that argument in its August 2, 2018 Order in which it concluded that the “[t]he Judgment will not be satisfied until the funds are paid from the GT Settlement, as well as accrued interest since April 20, 2018.” (Doc. 313 at 9.) The Court denied the Baldinos' motion for relief from judgment and Sperber-Porter's motion to release judgment lien. (Id. at 9-10.) Because the Court has not determined that the Judgment has been paid in full, the Court rejects Sperber-Porter's mootness objection to the subpoena.^[5]

         B. Scope of Subpoena

         In the alternative, Sperber-Porter argues that the subpoena is overly broad because it seeks information related to her marital community property, which is not liable for the Judgment. (Doc. 273 at 4-5.) Specifically, she notes that the subpoena seeks the production of “bank statements for all accounts belonging to you or in which you have or have had any interest from January 1, 2013 to the present.” (Doc. 273 at 5, Doc. 273, Ex. 1 at 3.) She also notes that the subpoena seeks copies of her tax returns for 2011 through 2018, including copies of her K-1 schedules.^[6] (Doc. 273 at 5; Doc. 273, Ex. 1 at 3.) Sperber-Porter states that she and her husband have always filed a joint tax return. (Doc. 273 at 5.) She asserts that her husband, a non-party, is not required to produce the requested information regarding his finances and tax returns and that his “privacy interests in the third party financial information must be respected and protected by this court.” (Doc. 273 at 5; Doc. 292 at 6-7.) Sperber-Porter asserts that the Court should “quash and/or modify those parts of the Subpoena that are overly broad and request documents from a non-party to the Judgment.” (Doc. 292 at 7, 10; Doc. 273 at 4.)

         1. Rules 45(d)(3), 69(a)(2), and 26(b)

         The Court applies Rule 45(d)(3) of the Federal Rules of Civil Procedure to the pending motion to compel because Sperber-Porter asserts that the Court should quash or modify the subpoena to protect her husband's privacy interest in the requested financial information. Rule 45(d)(3)(A) identifies circumstances in which a court is required to grant a motion to quash or modify a subpoena. Rule 45(d)(3)(A)(iii) provides in pertinent part that “[o]n a timely motion, the issuing court must quash or modify a subpoena that . . . requires disclosure of privileged or other protected matter, if no exception or waiver applies.” Fed.R.Civ.P. 45(d)(3)(A)(iii)-(iv).

         The Court also applies Rule 69(a)(2) to Sperber-Porter's objection to the subpoena. Rule 69(a)(2) authorizes discovery in judgment enforcement proceedings and provides that a judgment creditor “may obtain discovery from any person-including the judgment debtor-as provided in these rules or by the procedure of the state where the court is located.” Fed.R.Civ.P. 69(a)(2) (emphasis added). “This rule entitles a judgment creditor to ‘a very thorough examination of the judgment debtor.'” Internet Direct Response, Inc. v. Buckley, 2010 WL 1752181, at *2 (C.D. Cal. Apr. 29, 2010) (quoting Credit Lyonnais, S.A. v. SGC Intl., Inc., 160 F.3d 428, 430-31 (8th Cir. 1998)). “A judgment creditor ‘must be given the freedom to make a broad inquiry to discover hidden or concealed assets of the judgment debtor.'” Sequoia Prop. & Equip. Ltd. P'ship v. United States, 2002 WL 32388132, at *3 (E.D. Cal. June 3, 2002) (quoting Caisson Corp. v. County West Bldg. Corp., 62 F.R.D. 331, 334 (E.D. Pa.1974)). Thus, “[t]he presumption should be in favor of full discovery of any matters arguably related to the [creditor's] efforts to trace [the debtor's] assets and otherwise to enforce the judgment.” Internet Direct, 2010 WL 1752181, at *2 (quoting Credit Lyonnais, 160 F.3d at 430-31). Under Rule 69, a judgment creditor may obtain discovery from parties and non-parties. See Caisson Corp., 62 ...