Opinion
No. 8:98CV362.
June 24, 1999.
ORDER AND NOTICE OF HEARING
This matter is before me pursuant to 28 U.S.C. § 636 and the general order of referral on the motion of defendant, Medical X-Ray Center, P.C., for leave to conduct a debtor's examination (#2). A copy of the motion was served on the plaintiff by certified mail, and the court has not received a response in opposition to the motion.
The court file shows that on October 24, 1997, a judgment in the amount of $99,845.62 in taxable costs was entered in favor of the defendant and against the plaintiff by the U.S. District Court for the District of South Dakota. The judgment in the underlying action has been affirmed on appeal. Read v. Medical X-Ray Center, P.C., 110 F.3d 543 (8th Cir. 1997).
Defendant registered the South Dakota judgment in this court pursuant to 28 U.S.C. § 1963 and seeks to conduct discovery pursuant to Fed.R.Civ.P. 69(a), which provides: "In aid of the judgment or execution, the judgment creditor . . ., may obtain discovery from any person, including the judgment debtor, in the manner provided in these rules or in the manner provided by the practice of the state in which the district court is held." Under the Federal Rules of Civil Procedure, defendant has a right to conduct reasonable post-judgment discovery and to inquire into plaintiff's assets. Defendant "'is entitled to a very thorough examination of the judgment debtor.'" Credit Lyonnais, S.A. v. SGC Intern. Inc., ___ F.3d ___, No. 97-2945EM, 1998 WL 767534 (8th Cir., Nov. 5, 1998) (quoting Caisson Corp. v. County West Building Corp., 62 F.R.D. 331, 335 (E.D.Pa. 1974)).
Rule 69(a) also provides that the procedure on execution, in proceedings supplementary to and in aid of a judgment, and in proceedings on and in aid of execution "shall be in accordance with the practice and procedure of the state in which the district court is held, existing at the time the remedy is sought," in this case, Neb. Rev. Stat. §§ 25-1564 through 25-1580. Section 25-1578 provides that the court's orders to judgment debtors and witnesses "shall be served as a summons in other cases."
IT THEREFORE IS ORDERED:
1. Defendant's motion for leave to conduct a debtor's examination (#2) is granted.
2. Plaintiff, Ralph Read, M.D., shall appear in the Magistrate Courtroom West, 8th Floor, of the U.S. Post Office and Courthouse, 215 North 17th Street, Omaha, Nebraska on Wednesday, December 9, 1998 at 3:30 p.m. and answer questions concerning his assets, income, expenditures, personal and real property, and credits, before the Hon. Kathleen A. Jaudzemis, United States Magistrate Judge and/or counsel for Medical X-Ray Center, P.C.
3. Counsel shall serve a copy of this order and notice of hearing on Ralph Read, M.D., in the manner required by Neb. Rev. Stat. § 25-1578 and Fed.R.Civ.P. 4.
4. On or before December 1, 1998, counsel for Medical X-Ray Center, P.C. shall file a certificate of service showing compliance with paragraph 3, above, and listing the names and addresses of the persons to whom notice was sent.
ORDER AND NOTICE OF HEARING
This matter is before me pursuant to 28 U.S.C. § 636 and the general order of referral on defendant's motion to compel plaintiff to respond to questions posed at a debtor's examination conducted on December 9, 1998 (#7). The transcript of the December 9, 1998 proceeding has been filed at #6. Plaintiff has not responded to the motion to compel. For the reasons explained below, I find that the defendant's motion to compel should be granted.
BACKGROUND
On October 24, 1997, a judgment in the amount of $99,845.62 in taxable costs was entered in favor of the defendant and against the plaintiff by the U.S. District Court for the District of South Dakota. The judgment in the underlying action was affirmed on appeal. Read v. Medical X-Ray Center, P.C., 110 F.3d 543 (8th Cir. 1997). Defendant registered the South Dakota judgment in this court pursuant to 28 U.S.C. § 1963, and this court granted defendant's motion for leave to conduct a debtor's examination.
During the December 9, 1998 debtor's examination, however, plaintiff refused to answer questions regarding his current address; social security number; marital status; current employment; employment of his spouse; the value of his residence or other real estate owned by him; mortgages; vehicles; bank accounts; certificates of deposit; retirement accounts; dependents; supplemental income; safety deposit box; investment accounts; aliases; stocks; transfers of monies, stock or personal property within the past 90 days; corporate and partnership interests and affiliations; property owned by his spouse; credit card limits; and annuities.
Plaintiff's refusal to answer any of the questions was based on the Fifth Amendment to the U.S. Constitution, which provides, "No person . . . shall be compelled in any criminal case to be a witness against himself. . . ." The Fifth Amendment privilege against self-incrimination protects the person claiming it from being compelled to give "answers that would in themselves support a conviction" or that "would furnish a link in the chain of evidence needed to prosecute the claimant" for a crime. Hoffman v. United States, 341 U.S. 479, 486 (1951). The privilege extends to questions propounded in a civil action, whether the claimant is a party or a witness. Maness v. Myers, 419 U.S. 449, 464 (1975);Kastigar v. United States, 406 U.S. 441, 444-45 (1972). The individual asserting the privilege is not "required to prove the hazard [of incrimination] in the sense in which a claim is usually required to be established in court," Hoffman, 341 U.S. at 486; rather the privilege may validly be asserted whenever "the witness has reasonable cause to apprehend danger from a direct answer."Id. That a witness actually fears incrimination from answering questions is not enough. The fear must be reasonable in light of the witness' specific circumstances, the content of the questions, and the setting in which the questions are asked. Id.; accord Zicarelli v. New Jersey State Commission of Investigation, 406 U.S. 472, 480 (1972); Malloy v. Hogan, 378 U.S. 1, 11-14 653 (1964).
The trial court must evaluate the incriminatory potential of questions asked. Hoffman, 341 U.S. at 487. The claim of privilege cannot be sustained if the fear of self-incrimination rests on "remote and speculative possibilities"; the privilege protects only against "real dangers." Zicarelli, 406 U.S. at 478, 92 S.Ct. at 1675. Stated differently, the Fifth Amendment privilege does not allow a judgment debtor to conceal such assets as he might own merely by uttering the incantation, "I hereby invoke the Fifth Amendment to the United States Constitution and thus refuse to answer this [question] on the grounds that my answer may tend to incriminate me." Brunswick Corp. v. Doff, 638 F.2d 108, 110 (9th Cir. 1981).
In Credit Lyonnais, S.A. v. SGC International, Inc., 160 F.3d 428 (8th Cir. 1998), the court held that a deposition was an appropriate method for a judgment creditor to obtain information about assets in order to execute on its judgment. The court noted that the Federal Rules of Civil Procedure specifically provide the right to post-judgment discovery and noted that the creditor was entitled to "a very thorough examination of the judgment debtor." (Internal citation omitted). Id. at 430.
Magistrate Judge Thalken (who conducted the debtor's examination) advised Dr. Read that, in order to claim Fifth Amendment protection, he must have a good faith basis to believe he would be subject to criminal prosecution if he answered defendant's questions. Judge Thalken also advised Dr. Read of the possibility he could be found in contempt of court under the Recalcitrant Witness Act, 28 U.S.C. § 1826. (#6, 26:11-29:13).
In this case, it is not evident from the hearing transcript that responsive answers or explanations would incriminate Dr. Read. I find that the debtor's examination attempted by the defendant on December 9, 1998 was in all respects appropriate and was permitted under the Federal Rules of Civil Procedure. I shall, therefore, schedule a second debtor's examination and order plaintiff to answer defendant's questions.
In addition to possible liability under the Recalcitrant Witness Act, Dr. Read may be subject to a finding of civil or criminal contempt under 28 U.S.C. § 636(e), which provides:
(e) In a proceeding before a magistrate, any of the following acts or conduct shall constitute a contempt of the district court for the district wherein the magistrate is sitting: . . . (3) failure to produce, after having been ordered to do so, any pertinent document; . . .; or (5) any other act or conduct which if committed before a judge of the district court would constitute contempt of such court. Upon the commission of any such act or conduct, the magistrate shall forthwith certify the facts to a judge of the district court and may serve or cause to be served upon any person whose behavior is brought into question under this section an order requiring such person to appear before a judge of that court upon a day certain to show cause why he should not be adjudged in contempt by reason of the facts so certified. A judge of the district court shall thereupon, in a summary manner , hear the evidence as to the act or conduct complained of and, if it is such as to warrant punishment , punish such person in the same manner and to the same extent as for a contempt committed before a judge of the court, or commit such person upon the conditions applicable in the case of defiance of the process of the district court or misconduct in the presence of a judge of that court.
(Emphasis added). Having been ordered to answer defendant's questions at the debtor's examination, Dr. Read would be well advised to avoid making frivolous or bad-faith claims of privilege based on the Fifth Amendment.
IT IS ORDERED that defendant's motion to compel (#7) is granted as follows:
1. Plaintiff, Ralph Read, M.D., shall appear in the Magistrate Courtroom West, 8th Floor, of the U.S. Post Office and Courthouse, 215 North 17th Street, Omaha, Nebraska on July 29, 1999, at 2:00 p.m. and answer questions concerning matters including, but not limited to, his assets, income, expenditures, personal and real property, and credits, before the Hon. Kathleen A. Jaudzemis, United States Magistrate Judge and/or counsel for defendant, Medical X-Ray Center, P.C.
3. Counsel for defendant shall serve a copy of this order and notice of hearing on Ralph Read, M.D., in the manner required by Neb. Rev. Stat. § 25-1578 and Fed.R.Civ.P. 4.
4. On or before July 23, 1999, counsel for Medical X-Ray Center, P.C. shall file a certificate of service showing compliance with paragraph 3, above, and listing the names and addresses of the persons to whom notice was sent.