Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-azd-2_09-cv-02556/USCOURTS-azd-2_09-cv-02556-2/pdf.json

Nature of Suit Code: 290
Nature of Suit: Other Real Property Actions
Cause of Action: 12:1819 Default of Promissory Note

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IN THE UNITED STATES DISTRICT COURT

FOR THE DISTRICT OF ARIZONA

FEDERAL DEPOSIT INSURANCE

CORPORATION, as Receiver for IRWIN

UNION BANK, F.S.B., a federal savings

bank, 

Plaintiff, 

vs.

PHOENIX CASA DEL SOL, L.L.C., an

Arizona limited liability company; and

JOHN AND JANES DOES I-X,

Defendant. 

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No. 09-CV-2556-PHX-JAT

ORDER

Currently before the Court is Resolute Commercial Services, LLC’s (the “Receiver”)

Motion for Order to Show Cause Why the FDIC Should Not Be Held in Contempt. (Doc.

80.) Having reviewed the Parties’ briefs, the Court issues the following Order. 

I. BACKGROUND

Irwin Union Bank, F.S.B. (the “Bank”) sought to appoint a receiver to control and

manage the Phoenix Casa Del Sol apartment complex located at 6805 North 27th Avenue,

Phoenix, Arizona (the “Property”), because the owner was in default on the Bank’s loan on

the Property. On March 17, 2009, the Receiver was appointed as receiver of the Property.

On September 18, 2009, the Federal Deposit Insurance Corporation (the “FDIC”) was

appointed receiver of the Bank. On December 15, 2009, a trustee’s sale of the Property was

completed pursuant to foreclosure proceedings. On March 3, 2011, in its Order granting the

Receiver’s Motion to Terminate, Receivership, Release and Exonerate the Bond, Disburse

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Funds, and Approve Final Accounting, the Court approved the Receiver’s final accounting

and awarded attorneys’ fees, expenses and costs totaling $61,243.26. (Doc 56.) The

Receiver alleges that it has not received any payment from the FDIC and that despite several

attempts to collect information concerning the payment date, none has been given. 

II. LEGAL STANDARD

The Court has wide discretion in determining whether a party has defied a court order.

In re Crystal Palace Gambling Hall, 817 F.2d 1361, 1364 (9th Cir. 1987). And the Court

can hold in civil contempt a party who has disobeyed a specific and definite court order by

failing to take all reasonable steps within the party’s power to comply. In re Dual-Deck

Video Cassette Recorder Antitrust Litigation, 10 F.3d 693, 695 (9th Cir. 1993); see also 18

U.S.C. §401 (“A court of the United States shall have power to punish by fine or

imprisonment, or both, at its discretion, such contempt of its authority . . . as . . . disobedience

or resistance to its lawful writ, process, order, rule, decree, or command.”). 

A party’s contempt does not have to be willful, and no good faith exception exists.

In re Dual-Deck, 10 F.3d at 695. But the Court will not hold a party in contempt if the

party’s behavior appears to be based on a good faith and reasonable interpretation of the

Court’s order. Id. Substantial compliance with the Court’s order is a defense to civil

contempt, and substantial compliance “is not vitiated by a few technical violations where

every reasonable effort has been made to comply.” Id. (internal citations omitted). Nor will

the Court hold a party in contempt if the party is unable to comply with the court order. In

re Crystal Palace, 817 F.2d at 1365. 

The party alleging civil contempt has the burden of demonstrating that a violation of

the court’s order occurred. In re Dual-Deck, 10 F.3d at 695. The party asserting contempt

must show it by clear and convincing evidence. Id. 

If the Court finds a party in contempt, then it may impose sanctions against the party

to ensure compliance with the Court’s order or to compensate the party injured by the

noncompliance. Whittaker Corp. v. Execuair Corp., 953 F.2d 510, 517 (9th Cir. 1992).

“Civil contempt is characterized by the court’s desire to compel obedience to a court order

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As a result, the Court finds no need to address the FDIC’s contention that “the

Receiver’s Motion is inappropriate and unauthorized.”

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or to compensate the contemnor’s adversary for the injuries which result from the

noncompliance.” U.S. v. Bright, 596 F.3d 683, 695– 96 (9th Cir. 2010). Generally, the Court

should impose the minimum sanction necessary to secure compliance. Id. at 696. But the

Court retains discretion to establish appropriate sanctions. Id. 

When the Court determines the size and duration of a coercive sanction, it should

consider the character and magnitude of the harm threatened by continued contempt, and the

probable effectiveness of any suggested sanction in bringing about the result desired.

Whittaker Corp., 953 F.2d at 517. The amount of a compensatory sanction is also within the

discretion of the Court. U.S. v. Asay, 614 F.2d 655, 660 (9th Cir. 1980). But ordinarily the

amount of a compensatory fine is the actual damage caused by a party’s contumacious act.

Id.

III. ANALYSIS 

The FDIC correctly asserts that the Court has no authority to enforce a specific

deadline by which the FDIC must pay the Receiver.1

 The FDIC correctly cites the Financial

Institutions Reform, Recovery, and Enforcement Act of 1989 (“FIRREA”) as the controlling

authority. 12 U.S.C. §§ 1811, et seq. (2011). Pursuant to FIRREA, unless otherwise

provided, no court has jurisdiction over “any claim or action for payment from, or any action

seeking a determination of rights with respect to, the assets of any depository institution for

which the [FDIC] has been appointed receiver, including assets which the [FDIC] may

acquire from itself as such receiver.” 12 U.S.C. § 1821(d)(13)(D). 

The Receiver fails to effectively dispute the applicability of FIRREA to the issue at

hand. In fact, the Receiver’s sole response is that the Court considered FIRREA and

nevertheless ordered the FDIC to make payment “forthwith.” This response is deficient for

two reasons. First, the Court prefaced such Order by acknowledging that it is “unaware of

any authority which allows it to set a date certain for payment.” (Doc. 74 at 5.) Thus, the

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The Parties have not addressed this issue.

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Court expressly recognized the absence of authority to mandate payment by a specific date.

The Receiver has not demonstrated that the Court now has the requisite authority. Second,

although “forthwith” implies a sense of immediacy, in no way is it specific or definite. See

In re Dual-Deck, 10 F.3d at 695.

Alternatively, case law supports the argument that the Court lacks authority to

mandate a payment deadline. Although, the Court has the power to adjudge in civil contempt

any person who willfully disobeys a specific and definite order requiring him to do or to

refrain from doing an act, the Court generally cannot use its contempt powers to enforce an

award of money. Shuffler v. Heritage Bank, 720 F.2d 1141, 1146–48 (9th Cir. 1983). The

Receiver has not demonstrated that exceptional circumstances exist that would justify the

Court’s use of a procedure other than a writ of execution to enforce a money award.2

 See

Hilao v. Estate of Marcos, 95 F.3d 848, 855 (9th Cir. 1996).

Finally, the FDIC also correctly asserts that it may pay the Receiver with receiver’s

certificates. See Battista v. FDIC, 195 F.3d 1113, 1116 (9th Cir. 1999) (holding that “there

is no question that the FDIC may pay creditors with receiver’s certificates instead of with

cash”). Therefore, the FDIC is only bound to pay the Receiver in cash insofar as it has

agreed to. 

Accordingly, 

IT IS ORDERED Denying the Receiver’s Motion for Order to Show Cause Why the

FDIC Should not Be Held in Contempt (Doc. 80).

DATED this 12th day of December, 2011.

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