United States District Court, D. Arizona
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 ...