ORDER FOR APPEARANCE AND EXAMINATION OF DANIEL M. FOLK ON BEHALF OF JUDGMENT DEBTOR SACRAMENTO E.D.M., INC.
KENDALL J. NEWMAN, Magistrate Judge.
I. INTRODUCTION
On April 18, 2017, judgment was entered in favor of Judgment Creditor, Hynes Aviation Industries, Inc. ("Judgment Creditor" or "Hynes Aviation"), and against counter-defendant, Sacramento E.D.M., Inc. (Judgment Debtor), in the United States District Court for the Eastern District of California [ECF No. 150]. On March 27, 2019, the Court filed its Amended Judgment [ECF No. 160]. The Judgment and Amended Judgment awarded net relief in favor of Hynes Aviation and against Judgment Debtor in the total amount of $795,750.36.
II. DISCUSSION
Judgment Creditor has filed an application for a debtor examination and production of documents. Pursuant to Federal Rule of Civil Procedure 69(a)(1), "The procedure on execution—and in proceedings supplementary to and in aid of judgment or execution—must accord with the procedure of the state where the court is located, but a federal statute governs to the extent it applies." "[T]he procedure on execution is to be in accordance with the procedure of the state in which the district court is located at the time the remedy is sought." In re Estate of Ferdinand Marcos Human Rights Litigation, 536 F.3d 980, 987-988 (9th Cir. 2008). In turn, California Code of Civil Procedure Section 708.110 provides, in relevant part:
(a) The judgment creditor may apply to the proper court for an order requiring the judgment debtor to appear before the court, or before a referee appointed by the court, at a time and place specified in the order, to furnish information to aid in enforcement of the money judgment.
(b) If the judgment creditor has not caused the judgment debtor to be examined under this section during the preceding 120 days, the court shall make the order upon ex parte application of the judgment creditor.
(c) If the judgment creditor has caused the judgment debtor to be examined under this section during the preceding 120 days, the court shall make the order if the judgment creditor by affidavit or otherwise shows good cause for the order. The application shall be made on noticed motion if the court so directs or a court rule so requires. Otherwise, it may be made ex parte.
(d) The judgment creditor shall personally serve a copy of the order on the judgment debtor not less than 10 days before the date set for the examination. Service shall be made in the manner specified in Section 415.10. Service of the order creates a lien on the personal property of the judgment debtor for a period of one year from the date of the order unless extended or sooner terminated by the court.
(e) The order shall contain the following statement in 14-point boldface type if printed or in capital letters if typed: "NOTICE TO JUDGMENT DEBTOR. If you fail to appear at the time and place specified in this order, you may be subject to arrest and punishment for contempt of court and the court may make an order requiring you to pay the reasonable attorney's fees incurred by the judgment creditor in this proceeding."
Cal. Code Civ. Proc. § 708.110(a)-(e). California Code of Civil Procedure Section 708.160(b) also provides that "[a] person sought to be examined may not be required to attend an examination before a court located outside the county in which the person resides or has a place of business unless the distance from the person's place of residence or place of business to the place of examination is less than 150 miles." Cal. Code Civ. Proc. § 708.160(b).
Plaintiff's application sets forth the showing required by Federal Rule of Civil Procedure 69(a)(2) and the applicable provisions of the California Code of Civil Procedure Sections 708.110 and 708.160.
Plaintiff also seeks to require the judgment debtor to produce documents prior to the examination. Under California law, judgment debtor proceedings "permit the judgment creditor to examine the judgment debtor, or third persons who have property of or are indebted to the judgment debtor, in order to discover property and apply it toward the satisfaction of the money judgment." United States v. Feldman, 324 F.Supp.2d 1112, 1116 (C.D. Cal. 2004) (quoting Imperial Bank v. Pim Elec., Inc., 33 Cal.App.4th 540 (1995)). Debtor examination is intended "to allow the judgment creditor a wide scope of inquiry concerning property and business affairs of the judgment debtor, and to leave no stone unturned in the search for assets which might be used to satisfy the judgment." Alcalde v. NAC Real Estate Investments & Assignments, Inc., 580 F.Supp.2d 969, 970 (C.D. Cal. 2008) (citations and internal punctuation omitted).
Federal Rule of Civil Procedure 34 authorizes a party to seek production of documents. Further, California Code of Civil Procedure Section 708.030(a) provides that a "judgment creditor may demand that any judgment debtor produce and permit the party making the demand, or someone acting on that party's behalf, to inspect and to copy a document that is in the possession, custody, or control of the party on whom the demand is made...." Cal. Code Civ. Proc. § 708.030. Accordingly, the judgment debtor shall produce the following documents for inspection as directed by this order:
(1) Any and all information and documentation identifying real property, personal property, computers, intellectual property, vehicles, boats, brokerage accounts, retirement accounts, life insurance policies, bank deposits, securities, cash and all other assets owned by Sacramento E.D.M., Inc., including, but not limited to, information relating to financial accounts and monies owed to Sacramento E.D.M., Inc. by others. Such information and documents shall include, without limitation, the location of any and all property and assets of Sacramento E.D.M., Inc.
(2) All tax returns filed by Sacramento E.D.M., Inc. with any governmental body for the years 2015 through the present.
(3) All of Sacramento E.D.M., Inc.'s accounting records, computerized, electronic and/or in printed or paper format for the years 2016 through the present.
(4) All of Sacramento E.D.M., Inc.'s statements, cancelled checks and related banking documents for any bank, brokerage or financial account at least partially controlled by Sacramento E.D.M., Inc., or recorded in the name of Sacramento E.D.M., Inc. for the years 2016 through the present.
(5) All of Sacramento E.D.M., Inc.'s checkbooks, checkbook stubs and checkbook entries for the years 2016 through the present.
(6) All settlement agreements, promissory notes, and any other writings by which another party has agreed to pay money to Sacramento E.D.M., Inc.
(7) All settlement agreements, promissory notes, and any other writings by which Sacramento E.D.M., Inc. has agreed to pay money to another party.
(8) All of Sacramento E.D.M., Inc.'s records of accounts payable and receivables, payroll check stubs, passbooks, financial statements, deeds, promissory notes and stock registers.
(9) All credit or debit card statements of Sacramento E.D.M., Inc. for the years 2016 through the present.
(10) All credit or debit card statements of any other person or entity, pertaining to financial accounts used for costs or expenses relating to the business of Sacramento E.D.M, Inc., for each month for the years 2016 through the present.
(11) Documents sufficient to show Sacramento E.D.M., Inc.'s balance sheet for each month for the years 2016 through the present.
(12) Documents sufficient to show Sacramento E.D.M., Inc.'s gross revenues for each month for the years 2016 through the present.
(13) Documents sufficient to show any and all payments made to or for the benefit of Daniel M. Folk by any other person or entity as a result of, or relating to revenues generated by the business of Sacramento E.D.M, Inc. for each month during the years 2016 to the present.
(14) Documents sufficient to show Sacramento E.D.M., Inc.'s expenditures of funds for any purpose for each month for the years 2016 through the present.
(15) Any and all leases pertaining to any real or personal property, effective at any time from January 1, 2016 to the date of the examination, to which Sacramento E.D.M., Inc. is a party, whether as lessor or lessee, including all exhibits and amendments of such leases.
(16) Any and all leases pertaining to any real or personal property, effective at any time from January 1, 2016 to the date of the examination, to which Summit Leasing Partners LP is a party, whether as lessor or lessee, including all exhibits and amendments of such leases.
(17) Documents sufficient to show agreements by Sacramento E.D.M., Inc., with Summit Leasing Partners LP regarding business of any kind or financial arrangements of any kind between the two entities, at any time between January 1, 2016 and the date of the examination.
(18) Documents sufficient to show agreements by Sacramento E.D.M., Inc. with any other person or entity regarding business of any kind to be performed by Sacramento E.D.M., Inc. for such person or entity at any time after the date of this Order, whether on a recurring basis or otherwise.
(19) Any and all documents sufficient to show the name and address of each business in which each of Sacramento E.D.M., Inc.'s current or former officers, shareholders, and/or directors now has an interest and the nature of each such person's interest in each such business.
(20) Any and all documents sufficient to show any and all assets owned by any entities that currently are or previously were a subsidiary or affiliate of Sacramento EDM, Inc. during the years 2016 through the present.
(21) Any and all documents sufficient to show bank, brokerage, and/or financial records of any entities that currently are or previously were a subsidiary or affiliate of Sacramento EDM, Inc., during the years 2016 through the present.
(22) Any and all documents sufficient to show bank, brokerage, and/or financial records of any entities that currently are or previously were wholly owned by the shareholder(s) of Sacramento E.D.M., during the years 2016 through the present.
III. CONCLUSION
Based on the foregoing, IT IS HEREBY ORDERED that:
1. Daniel M. Folk, the registered agent of the Judgment Debtor shall appear personally on May 11, 2020, at 10:00 a.m. in Courtroom 25 of the United States District Court, located at 501 I Street, Sacramento, California, 95814, to furnish information to aid in enforcement of a money judgment by answering questions about the Judgment Debtor's real and personal property and assets;
2. Judgment Debtor shall produce documents responsive to this order to Thomas W. Barth of Barth Daly LLP, 2810 Fifth Street, Davis, California 95618 on or before April 13, 2020; and
3. Judgment Creditor must serve this order upon Daniel Folk the agent for service of process of the Judgment Debtor personally not less than ten (10) days before the date set for the examination and must file a certificate of such service with the Court.
IT IS SO ORDERED.
