Source: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-cand-4_18-cv-04614/USCOURTS-cand-4_18-cv-04614-3/pdf.json

Nature of Suit Code: 190
Nature of Suit: Other Contract Actions
Cause of Action: 28:1330 Breach of Contract

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United States District Court

Northern District of California

UNITED STATES DISTRICT COURT

NORTHERN DISTRICT OF CALIFORNIA

FEDERFIN TECH SRL,

Plaintiff,

v.

UNION PACKAGING, INC., et al.,

Defendants.

Case No. 18-cv-04614-HSG 

ORDER DENYING MOTION TO 

HOLD DEFENDANT IN CIVIL 

CONTEMPT AND DENYING MOTION 

FOR ATTORNEYS’ FEES AND COSTS

Re: Dkt. Nos. 35, 37

Pending before the Court is Plaintiff Federfin Tech SRL’s motion to hold Defendant Union 

Packaging, Inc. in civil contempt, Dkt. No. 35, and motion for attorneys’ fees and costs, Dkt. No. 

37. The Court finds this matter appropriate for disposition without oral argument and the matter is 

deemed submitted. See Civil L.R. 7-1(b). For the reasons detailed below, the Court DENIES the 

motions.

I. BACKGROUND

Plaintiff filed a lawsuit against Defendant on July 31, 2018, alleging claims for breach of 

contract; unjust enrichment; account stated, goods sold and delivered; violations of California’s

Unfair Competition Law; and breach of the implied covenant of good faith and fair dealing related 

to several orders that Defendant placed from Plaintiff between January 2014 and May 2017 for 

aluminum bottle caps. See Dkt. No. 1. On September 4, 2018, Defendant filed its own 

counterclaim against Plaintiff for breach of contract; breach of implied warranty of fitness for a 

particular purpose; and negligence based on allegations that the bottle caps were defective. See 

Dkt. No. 19.

The parties participated in private mediation, and on January 29, 2019, entered into a 

written settlement agreement. See Dkt. No. 35-1, Ex. 1 (“SA”). As part of the settlement 

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agreement, Defendant agreed to pay Plaintiff $150,000, to be paid in installments from January 

15, 2020, to June 15, 2021. Id. at 1–2. However, if Defendant missed any installment payment, 

then Defendant would owe $200,000 (less any prior installment payments) immediately. Id. at 2. 

Plaintiff, in turn, agreed to “use its best efforts” to file and collect a claim with its insurance for the 

defective bottle caps. Id. at 2. Any payment on the claim would be considered a credit against the 

money Defendant owed. Id. In conjunction with the settlement agreement, Defendant signed a 

promissory note for $200,000. Id. Plaintiff subsequently filed a stipulation to dismiss the case 

with prejudice on February 11, 2019. See Dkt. No. 30. Nevertheless, pursuant to the parties’ 

stipulation, the Court retained jurisdiction over any action to enforce the settlement agreement. 

See Dkt. No. 31 at 2.

Approximately a year later, Plaintiff filed a motion to enforce the settlement agreement. 

See Dkt. No. 32. Plaintiff explained that despite the terms of the settlement agreement, Defendant 

failed to make a single payment and thus breached the settlement agreement. Id. In support of the 

motion, Plaintiff attached email correspondence from Defendant’s counsel Wendy Rose, dated 

January 27, 2020. See Dkt. No. 32-1, Ex. 4. In response to a letter from Plaintiff claiming that 

Defendant was in default, Ms. Rose responded that Defendant “was dissolved last year and no 

longer exists.” Id. She further explained that “[t]here is deep debt” and the settlement between 

the parties in this matter “will be in line behind two ver[y] large loans that were also personally 

guaranteed.” Id. Ms. Rose stated that Defendant was thus “effectively bankrupt and not 

collectible.” Id. Following Plaintiff’s motion to enforce the settlement agreement, Defendant also 

filed a statement of non-opposition stating in a single sentence that Defendant “does not oppose 

the Motion to Enforce Settlement Agreement.” Dkt. No. 33. The Court granted the motion on 

February 27, 2020, and directed Defendant to tender payment in the amount of $200,000 to 

Plaintiff within 30 days of the date of the order. See Dkt. No. 34.

On April 1, 2020, Plaintiff filed a motion to hold Defendant in contempt and for contempt 

sanctions. See Dkt. No. 35. Plaintiff explains that it still has neither received payment from 

Defendant nor heard further from Defendant or its counsel regarding this case. See id. at 4. 

Instead, Plaintiff attaches the same correspondence from Ms. Rose, dated January 2020, in which 

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she states that Defendant was dissolved the year before. See Dkt. No. 35-1, Ex. 4. Plaintiff also 

filed a motion for attorneys’ fees and costs, seeking $5,983.10 in fees and $159.18 in costs. See 

Dkt. No. 37. As of the date of this order, Defendant has not responded to either motion.

II. DISCUSSION

A. Motion for Contempt

Plaintiff moves the Court to hold Defendant in contempt, issue a sanctions award to 

Plaintiff, and award Plaintiff its reasonable attorneys’ fees and costs for filing this contempt 

motion. See Dkt. No. 35.

“A court has wide latitude in determining whether there has been contemptuous defiance 

of its order.” In re Crystal Palace Gambling Hall, Inc., 817 F.2d 1361, 1364 (9th Cir. 1987). A 

court may hold a party in civil contempt when the party has displayed “disobedience to a specific 

and definite court order by failure to take all reasonable steps within the party’s power to comply.” 

In re Dual-Deck Video Cassette Recorder Antitrust Litig., 10 F.3d 693, 695 (9th Cir. 1993). A 

party’s behavior “need not be willful” to justify a finding of civil contempt as “there is no good 

faith exception.” Id. (quotation omitted). Still, “[t]he party alleging civil contempt must 

demonstrate that the alleged contemnor violated the court’s order by clear and convincing 

evidence.” Id. (quotation omitted). If a court finds a party in contempt, it has discretion in 

deciding whether to impose sanctions. “Sanctions for civil contempt may be imposed to coerce 

obedience to a court order, or to compensate the party pursuing the contempt action for injuries 

resulting from the contemptuous behavior, or both.” General Signal Corp. v. Donallco, Inc., 787 

F.2d 1376, 1379 (9th Cir. 1986). “Compensatory awards are limited to actual losses sustained as a 

result of the contumacy.” Id. (quotations omitted).

The Court recognizes the oddity of the case and declines to exercise its discretion to hold 

Defendant in contempt on the record before it. Unlike criminal contempt, civil contempt “seeks 

only to coerc[e] the defendant to do what a court had previously ordered him to do.” See Turner v. 

Rogers, 564 U.S. 431, 441 (2011) (quotations omitted). But the Court has little confidence that 

this objective would be well served by a contempt order in this case. Although Defendant did not 

respond to the motion, Plaintiff’s own filings in this case suggest that Defendant’s silence—and 

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indeed its lack of payment—is because the company “no longer exists” and was dissolved 

sometime in 2019. See Dkt. No. 35-1, Ex. 4. Although Plaintiff has repeatedly attached this

January 2020 email from Defendant to its own filings, Plaintiff has yet to discuss its implications 

for this case and the motions pending before the Court. However, before the Court may hold a 

party in civil contempt, it must find that it “fail[ed] to take all reasonable steps within the party’s 

power to comply.” In re Dual-Deck, 10 F.3d at 695 (emphasis added). Moreover, an inability to 

comply is a complete defense to civil contempt. See United States v. Drollinger, 80 F.3d 389, 393 

(9th Cir. 1996) (“Ability to comply is the crucial inquiry, and a court should weigh all the 

evidence properly before it determines whether or not there is actually a present ability to obey.”) 

The only evidence currently before the Court suggests that since 2019 Defendant could not 

comply with the Court’s order and remains unable to pay the settlement payment as directed by 

the Court in its February 27, 2020, order. See Dkt. No. 34. The Court “will not be blind to 

evidence that compliance is now factually impossible. Where compliance is impossible, neither 

the moving party nor the court has any reason to proceed with the civil contempt action.” See 

United States v. Rylander, 460 U.S. 752, 757 (1983).

The Court therefore DENIES the motion without prejudice. If Plaintiff is able to proffer

information about why it believes Defendant was nevertheless able to comply with the Court’s 

order and can still pay the agreed upon settlement amount, the Court will consider a renewed 

motion.

B. Motion for Attorneys’ Fees

Plaintiff also seeks attorneys’ fees and costs related to this lawsuit. See Dkt. No. 37. 

Plaintiff cites the parties’ settlement agreement, which states in relevant part:

[I]n the event an action is brought by any Party hereto to enforce this 

Agreement and/or the Promissory Note, the prevailing party shall be 

entitled to reasonable attorneys’ fees and costs in addition to all other 

relief to which that Party may be entitled.

See SA at 6. Because Plaintiff prevailed on its earlier motion to enforce the settlement agreement, 

Plaintiff contends that it is entitled to its reasonable fees and costs “for ‘all hours reasonably spent’ 

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on this litigation by its counsel.”1 See Dkt. No. 37 at 7. Plaintiff seeks compensation for 25.4 

hours of attorney and paralegal time, totaling $5,983.10, as well as $159.18 for “costs incurred 

with litigating this matter following the execution of the parties’ settlement agreement.” See id. 

The Court acknowledges that Plaintiff prevailed in its motion to enforce the settlement

agreement. See Dkt. No. 32. However, at least some of Plaintiff’s attorneys’ fees and costs cited 

in this motion appear to be for time spent throughout the litigation of this case, and not just in 

enforcing the settlement agreement. See, e.g., Dkt. No. 37 at 7 (asking for fees and costs “for ‘all 

hours reasonably spent’ on this litigation by its counsel.” (emphasis added)). The Court is not 

persuaded by Plaintiff’s expansive reading of the settlement agreement. The settlement 

agreement’s provision regarding attorneys’ fees appears limited to the “prevailing party” in actions 

“to enforce this Agreement and/or the Promissory Note.” See SA at 6. Plaintiff’s requested fees 

and costs are thus overinclusive.

Plaintiff’s billing records appear to include approximately $420 incurred even before the 

date by which Defendant was to pay the first installment payment under the settlement agreement. 

See Dkt. No. 37-2, Ex. A. And Plaintiff has also included substantial time spent preparing the 

motion to hold Defendant in contempt and for contempt sanctions, which the Court has denied. 

Plaintiff, therefore, does not appear to be the “prevailing party” on that motion as contemplated by 

the settlement agreement, and Plaintiff does not otherwise explain why it should be entitled to 

attorneys’ fees spent preparing that motion. And because much of the attorneys’ time is block 

billed, the Court cannot disaggregate the entries to determine what time was spent on enforcing the 

settlement agreement.

The Court therefore DENIES the motion without prejudice. Plaintiff may still renew its 

motion with more detailed support. Nevertheless, the Court notes that if Defendant cannot pay the 

agreed-upon settlement amount, it seems unlikely that it will be able to pay any attorneys’ fees or 

1 To the extent Plaintiff suggests that the Court has “granted [Plaintiff] the right to move the court” 

for attorneys’ fees and costs, see Dkt. No. 37 at 2, the Court clarifies that it merely set a deadline 

for the filing of such a motion when Plaintiff indicated its intention to file one. See Dkt. No. 32 at 

4–5. The Court did not make any substantive determinations about the merits or prudence of such 

a motion.

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costs either. 

III. CONCLUSION

Accordingly, the Court DENIES WITHOUT PREJUDICE the motions in their entirety.

IT IS SO ORDERED.

Dated:

______________________________________

HAYWOOD S. GILLIAM, JR.

United States District Judge

5/21/2020

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