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Higdon v. Whitehead
Citations: 571 So. 2d 281; 1990 Miss. LEXIS 723Docket: No. 89-M-971
Court: Mississippi Supreme Court; December 4, 1990; Mississippi; State Supreme Court
The Court addressed objections from a third party regarding the scope of a judgment creditor's post-judgment examination. It ruled that the judgment creditor is permitted to conduct the examination, limited to non-privileged matters relevant to claims about the judgment debtor's assets that could satisfy the judgment. In a prior civil action, John J. Whitehead and Larry Whitehead obtained a judgment against Kent T. Higdon for $328,011.83. Following this, they initiated a post-judgment examination, targeting Luther D. Burchinal, who they believed had knowledge of Higdon’s assets. Burchinal was subpoenaed to produce documents related to Higdon’s employment and financial dealings. Although he complied partially, he objected to the examination due to being a non-party, provided a contract, and an itemization of payments made to Higdon. The Circuit Court overruled his objections, compelled him to testify in open court, and held him in contempt for refusing to answer questions, imposing a suspended ten-day jail sentence and a $50 fine. Burchinal sought to appeal the contempt ruling, prompting the Court to clarify the examination process for judgment creditors, which is designed to uncover asset information often held by third parties, consistent with rules similar to the Federal Rules of Civil Procedure. Rule 69(b), Miss. R.Civ. P. allows creditors to examine debtors or third parties regarding non-privileged matters related to the debtor's property. Judgment creditors may choose between discovery procedures outlined in Rules 26-37 or the procedures specified in Miss.Code Ann. 13-1-261 et seq. The case of H. W Transfer. Cartage Service v. Griffin established that the rule can be enforced against corporate officers of debtors, even if they are not direct parties to the action. However, the application of this rule regarding the examination of third parties not related to the debtor has not been previously considered. The general principle, guided by Rule 26(b), allows the examination of third parties about the debtor's assets, but prohibits inquiries into the third party’s personal matters. Authorities suggest that while creditors can question third parties to uncover hidden debtor assets, such inquiries must remain relevant and not serve as harassment. Protection for third parties can be ensured by requiring a demonstration of the relationship between the debtor and third party before allowing in-depth questioning. Existing guidelines indicate that while third parties can be examined about the debtor's financial affairs, questions must not be overly broad or intrusive. In the case involving Burchinal, while he was subject to examination, the Circuit Court's contempt ruling was based on overly broad questions, leading to the vacating of that order and remanding for further proceedings. The court did not address potential conflicts between MRCP 69 and the statute, noting that the rule extends the statute to allow examinations of other individuals related to the debtor's property.