Opinion
CIVIL ACTION NO. 02-0208, SECTION "R" (4)
January 28, 2004
ORDER AND REASONS
Defendant 3 Eagles Aviation, Inc. moves this Court to hold Clayton Kresge, President of Standard Collision, in contempt of court and to award sanctions to 3 Eagles for Kresge's failure to comply with this Court's September 2, 2003 order (Rec. Doc. No. 117). Defendant has filed no opposition to the motion for contempt and sanctions. For the following reasons, the Court GRANTS 3 Eagles's motion. I. Background
In October 2002, this Court entered judgment against plaintiff Wayne Rousseau, judgment debtor, and in favor of 3 Eagles in the amount of $1,341,462,14, plus interest at the rate of $556.44 per diem. In order to satisfy the judgment, 3 Eagles applied for and obtained a writ of fieri facias ordering the United States Marshal for the United States District Court for the Eastern District of Louisiana to seize and to take into his possession the property, rights, and credits of Rousseau.
In February 2002, Rousseau tendered to Standard Collision three checks totaling $285,028.87. In June 2003, the United States Marshal served a citation, a petition of garnishment, and garnishment interrogatories on Standard through its registered agent for service of process, Clayton Kresge, who is also the president of the corporation. Standard, through its attorney of record, confirmed under oath that Rousseau had invested $285,028.87 in Standard in return for a 3.6774% interest in the company's common stock.
In August 2003, 3 Eagles filed a Motion for Order to Turn Over and Deposit Seized Funds. One month later, this Court issued an order directing Standard to liquidate Rousseau's investment and to turn over and deposit the sum of $285,028.87 into this Court's registry. This order was personally served on Kresge on September 23, 2003.
3 Eagles now moves the Court to hold Kresge in contempt and to sanction him pursuant to Federal Rule of Civil Procedure 70. 3 Eagles alleges that since the order was personally served on Kresge, Kresge has neither liquidated Rousseau's investment, nor has he deposited the requisite monies into the Court's registry.
In December 2003, counsel for plaintiff and defendant moved to continue submission of this matter until January 7, 2003. The Court granted the motion to continue. Despite the continuance, defendant has still not filed an opposition to the motion for contempt and sanctions.
II. Discussion
It is axiomatic that a district court has jurisdiction to enforce its own order. See Cook v. Ochsner Found. Hosp., 559 F.2d 270, 272 (5th Cir. 1977). Pursuant to Rule 70, this Court has the power to adjudge a party in contempt and to sanction him for failure to comply with a court order. See FED. R. CIV. P. 70; Gilbert v. Johnson, 490 F.2d 827, 830 (5th Cir. 1974). Rule 70 states, in pertinent part,
A garnishee is a party to a suit. See, e.g., Simon v. Montgomery, 54 F. Supp.2d 673, 675 (M.D. La. 1999) (holding that pursuant to the Louisiana Code of Civil Procedure, a garnishee is a party to a civil suit); Conversion Chem. Corp. v. Dr.-Ing. Max Schloetter Fabrik Fur Galvanotechnik, 49 F.R.D. 126, 127-28 (D. Conn. 1969) (holding that a garnishee is a party to a civil suit for purposes of Federal Rule of Civil Procedure 34).
[i]f a judgment directs a party . . . to perform any other specific act and the party fails to comply within the time specified, the court may direct the act to be done at the cost of the disobedient party . . . The court may also in proper cases adjudge the party in contempt.
FED. R. CIV. P. 70. In addition, a court may award the moving party in a civil contempt proceeding attorneys' fees. See Cook, 559 F.2d at 272. "The theory for allowing attorneys' fees for civil contempt is that civil contempt is a sanction to enforce compliance with an order of the court or to compensate for losses or damages sustained by reason of noncompliance." Id. (citing United States v. United Mine Workers, 330 U.S. 258, 303-04 (1947)).
"Contempt is committed when a person `violates an order of a court requiring in specific and definite language that a person do or refrain from doing an act.'" In re Baum, 606 F.2d 592, 593 (5th Cir. 1979) (quoting Baumrin v. Cournoyer, 448 F. Supp. 225, 227 (D. Mass. 1978)). "Civil contempt . . . `is designed to coerce the comtemnor to comply with a court order. . . .'" Nasco, Inc. v. Calcasieu Television Radio, Inc., 583 F. Supp. 115, 119 (W.D. La. 1984). In a motion to hold a disobedient party in contempt, the moving party, here, 3 Eagles, bears the burden of proving by clear and convincing evidence that (1) a court order is in effect; (2) the order requires certain conduct by the disobedient party/ and (3) the diosbedient party has failed to perform an act in violation of the court's order. See id.
Here, 3 Eagles meets this burden. This Court's order to Standard Collision to liquidate Rousseau's investment and to deposit the monies into the Court's registry is in effect. The Court order specifically requires Standard to perform the above task "immediately." (Rec. Doc. No. 117). It has been over 45 days since service of this Court's order on Kresge, and he has failed to comply with the order. For the foregoing reasons, the Court holds Clayton Kresge, as president of Standard Collision, in contempt.
The Court notes that Clayton Kresge, as president and sole officer of Standard Collision, see Def.'s Ex. 1, is the proper party to hold in contempt and to sanction because he is responsible for the acts of the corporation. See, e.g., Wilson v. United States, 221 U.S. 361, 376 (1911) ("A command to the corporation is in effect a command to those who are officially responsible for the conduct of its affairs. If they, apprised of the writ directed to the corporation, . . . fail to take appropriate action within their power for the performance of the corporate duty, they, no less that the corporation itself, are guilty of disobedience, and may be punished for contempt.").
Moreover, the Court finds an award to 3 Eagles of attorneys' fees appropriate here. The Fifth Circuit has reasoned that attorneys1 fees are appropriate in a civil contempt proceeding because the moving party suffers further monetary damages when it is forced to bring a violation of a court order to the attention of the court: "It matters not whether the disobedience is willful, the cost of bringing the violation to the attention of the court is part of the damages suffered by the prevailing party and those costs would reduce any benefits gained by the prevailing party from the court's violated order." Cook, 559 F.2d at 272. For this reason, the Court exercises its discretion and awards reasonable attorneys' fees to 3 Eagles for the cost of ensuring compliance with this Court's September 2, 2003 order.
III. Conclusion
For the foregoing reasons, the Court GRANTS 3 Eagles motion. Clayton Kresge, as president of Standard Collision, is adjudged in contempt of court and ordered to pay reasonable attorneys' fees to 3 Eagles for the cost of bringing this violation to the attention of the court. The Court orders 3 Eagles to submit an affidavit attesting to its legal fees and the basis of its computation of those fees by February 18, 2004.
It is further ordered that Kresge has ten days from service of this order in which to comply with this Court's September 2, 2003 order.