Document ID: s3://data.kl3m.ai/documents/govinfo/USCOURTS/USCOURTS-ca9-12-56329/USCOURTS-ca9-12-56329-0/pdf.json

Parties Involved:
Martha Margarita Barba de la Torre
Appellant
Alejandro Diaz-Barba
Appellant
Donna L. Icenhower
Debtor
Jerry L. Icenhower
Debtor
Kismet Acquisition, LLC
Appellee

Document Text:

FOR PUBLICATION

UNITED STATES COURT OF APPEALS

FOR THE NINTH CIRCUIT

IN RE: JERRY L.

ICENHOWER, DBA

Seaview Properties;

DONNA L. ICENHOWER,

Debtors,

KISMET ACQUISITION,

LLC,

Plaintiff-Appellee,

v.

ALEJANDRO DIAZ-BARBA;

MARTHA MARGARITA

BARBA DE LA TORRE,

Defendants-Appellants.

No. 12-56329

D.C. Nos.

3:08-cv-02326-BTM-BLM

3:08-cv-02329-BTM-BLM

3:08-cv-02409-BTM-BLM

3:08-cv-02410-BTM-BLM

3:09-cv-00329-BTM-BLM

3:09-cv-00330-BTM-BLM

3:09-cv-00331-BTM-BLM

3:09-cv-00332-BTM-BLM

3:09-cv-00432-BTM-BLM

3:09-cv-00457-BTM-BLM

IN RE: JERRY L.

ICENHOWER, DBA

Seaview Properties;

DONNA L. ICENHOWER,

Debtors,

KISMET ACQUISITION,

LLC,

No. 12-56418

D.C. Nos.

3:08-cv-02326-BTM-BLM

3:08-cv-02329-BTM-BLM

3:08-cv-02409-BTM-BLM

3:08-cv-02410-BTM-BLM

3:09-cv-00329-BTM-BLM

3:09-cv-00330-BTM-BLM

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2 IN RE: ICENHOWER

Plaintiff-Appellant,

v.

ALEJANDRO DIAZ-BARBA;

MARTHA MARGARITA

BARBA DE LA TORRE,

Defendants-Appellees.

3:09-cv-00331-BTM-BLM

3:09-cv-00332-BTM-BLM

3:09-cv-00432-BTM-BLM

3:09-cv-00457-BTM-BLM

OPINION

Appeal from the United States District Court

for the Southern District of California

Barry T. Moskowitz, District Judge, Presiding

Argued and Submitted

February 11, 2014—Pasadena, California

Filed June 26, 2014

Before: Jerome Farris, N. Randy Smith,

and Paul J. Watford, Circuit Judges.

Opinion by Judge Farris

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IN RE: ICENHOWER 3

SUMMARY*

Bankruptcy

The panel affirmed the district court’s judgment affirming

in part and vacating in part the bankruptcy court’s postjudgment imposition of contempt sanctions on defendants for

failing to transfer a Mexican coastal villa to the plaintiff in a

bankruptcy adversary proceeding.

The panel held that the bankruptcy court had jurisdiction,

post-judgment, to substitute a property transferee because it

retained jurisdiction to supervise the course of conduct

mandated by the judgment.

The panel held that even though the bankruptcy court’s

contempt and sanctions orders were based solely on

affidavits, they did not violate due process because, in light

of the defendants’ noncompliance with the judgment, the

defendants bore the burden of showing their inability to

comply. The panel held that the judgment was sufficiently

specific to support a finding of civil contempt because it

ordered the defendants to undertake a specific and definite

course of conduct: to transfer the villa interest to the plaintiff

or its assignee. The panel rejected the defendants’ argument

that Mexican law rendered compliance with the judgment

impossible. The panel also held that the bankruptcy court’s

findings of contempt for a particular period were not clearly

erroneous.

* This summary constitutes no part of the opinion of the court. It has

been prepared by court staff for the convenience of the reader.

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The panel held that the bankruptcy court did not err in

issuing an order abrogating a defendant’s attorney-client

privilege.

On the plaintiff’s cross-appeal, the panel held that the

district court did not err in vacating compulsory sanctions of

$25,000 per day for a period before the defendants were put

on notice that their continued occupation of the villa would

trigger such sanctions.

COUNSEL

Edward I. Silverman (argued), Sandler, Lasry, Laube, Byer &

Valdez, LLP, San Diego, California, for DefendantAppellant/Cross-Appellee Alejandro Diaz-Barba.

D. Anthony Gaston (argued), Law Offices of D. Anthony

Gaston, San Diego, California, for DefendantAppellant/Cross-Appellee Martha Margarita Barba De La

Torre.

Janet D. Gertz (argued) and Ali M.M. Mojdehi, Cooley LLP,

San Diego, California, for Plaintiffs-Appellees/CrossAppellants.

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IN RE: ICENHOWER 5

OPINION

FARRIS, Circuit Judge:

This appeal arises from contempt sanctions issued by the

bankruptcy court against defendants Alejandro Diaz-Barba

and Martha Margarita Barba De La Torre (collectively, the

“Diazes”) for failing to transfer a Mexican coastal villa to

plaintiff Kismet Acquisition, LLC. The district court

confirmed that the Diazes’ conduct was sanctionable, but

remanded for consideration of appropriate sanctions. The

Diazes appealed the conclusion that their conduct was

sanctionable, and Kismet cross-appealed part of the district

court’s decision reversing the bankruptcy court.

We have jurisdiction pursuant to 28 U.S.C. § 158(d)(1). 

Despite the district court’s partial remand to the bankruptcy

court to recalculate the amount of fees and costs, immediate

review is proper: this appeal concerns primarily legal

questions regarding the propriety of the bankruptcy court’s

contempt orders, the factfinding to be conducted by the

bankruptcy court on remand is not related to a central issue

raised on appeal, and the Panel’s decision might dispose of

the case and obviate the need for factfinding. See In re

Lehtinen, 564 F.3d 1052, 1057 (9th Cir. 2009); In re Dyer,

322 F.3d 1178, 1187 (9th Cir. 2003); In re Bonner Mall

P'ship, 2 F.3d 899, 904 (9th Cir. 1993). We affirm.

I.

A. The bankruptcy court’s underlying judgment.

Debtors Jerry and Donna Icenhower owned an interest in

Villa Vista Hermosa, a coastal villa in Jalisco, Mexico. Their

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interest was not a fee simple, as Mexican law prohibits

foreign nationals from owning title to land within 100

kilometers of the border or 50 kilometers of the coast. See

Brady v. Brown, 51 F.3d 810, 814, 817 n.8 (9th Cir. 1995). 

Rather, Debtors held the beneficial interest in a fideicomiso

trust — an arrangement wherein a Mexican bank holds title

to property and a foreign national is granted the right to its

use. See id. at 814. A fideicomiso trust may be created only

with a permit issued by the Mexican Ministry of Foreign

Affairs. See id.

On March 4, 2002, Debtors purchased H&G, a shell

company, and transferred the Villa interest to H&G. On

December 15, 2003, Debtors filed for bankruptcy protection. 

On June 7, 2004, H&G sold the Villa interest to the Diazes

for $1.5 million.

On August 23, 2004, the bankruptcy trustee filed an

action seeking to avoid the transfer of the Villa interest from

Debtors to H&G as a fraudulent conveyance. On August 3,

2006, the trustee filed an action seeking to avoid the transfer

from H&G to the Diazes as an unauthorized postpetition

transfer. H&G did not appear in either action. By agreement

approved by the bankruptcy court on November 30, 2006,

Kismet purchased the estate’s assets and was substituted for

the trustee.

On June 2, 2008, following a bench trial, the bankruptcy

court ruled for Kismet in both actions. On the same day, the

court issued a separate judgment, ordering the Diazes, under

11 U.S.C. § 550(a):

[a] to take all actions necessary to execute and

deliver any and all documents needed to undo

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IN RE: ICENHOWER 7

the avoided transfer, and to take all actions

necessary to cause the property to be

reconveyed to a fideicomiso trust naming

[Kismet] as the sole beneficiary for the benefit

of the bankruptcy estate; or

[b] alternatively, at [Kismet]’s sole option

made upon proper noticed motion, the court

reserves jurisdiction to enter a monetary

judgment in favor of Kismet, and against

Defendants, in an amount necessary to make

the estate whole at the time of judgment.

On July 29, 2008, the court filed an Amended Consolidated

Judgment, in which it clarified that the Villa interest was an

interest in a fideicomiso trust, not a fee simple, and required

the Diazes to comply within 10 days. Following denials of a

stay pending appeal by both the bankruptcy court and district

court, the Diazes faced a compliance deadline of September

13, 2008.

B. Initial attempts by Kismet to effect the transfer.

Following the bankruptcy court’s issuance of the ACJ,

Kismet took the initiative in preparing documents by which

the Diazes would transfer the Villa interest. On August 7,

2008, Kismet provided the Diazes a draft power of attorney

to be used to convey the Villa interest to Kismet or its

assignee. The Diazes objected that the power of attorney

involved a conflict of interest, as the persons nominated to act

on their behalf worked at the same law firm as Kismet’s

counsel, and impermissibly allowed Kismet to transfer the

Villa interest to persons beyond the jurisdiction of U.S.

courts.

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On September 4, 2008, Kismet proposed that, rather than

execute a power of attorney, the Diazes appear before a

notary public in Mexico to execute appropriate transfer

documents. On September 9, Kismet sent the Diazes a

proposed transfer instrument that named a Mexican company,

Axolotl Inmobiliaria S. de R.oL. C.V., Kismet’s assignee, as

the beneficiary of the fideicomiso. The Diazes rejected this

document two days later, arguing that it should have specified

Kismet as the beneficiary of the fideicomiso “for the benefit

of the bankruptcy estate” and included language explicitly

referencing the bankruptcy case. On September 26, Kismet

circulated a new version of the transfer agreement that stated

that the bankruptcy court would continue to maintain

jurisdiction over the ACJ. Again, the Diazes objected that the

document named Axolotl as beneficiary. Also on September

26, counsel for Ms. Barba de la Torre wrote to Kismet, “[M]y

client is advised by Mexican counsel that the specific

performance portion of the Bankruptcy Court judgment (i.e.

undoing of the avoided transaction) cannot at least at this

stage of these proceedings, be accomplished under Mexican

law.”

On September 29, following an ex parte application by

Kismet, the bankruptcy court ordered the Diazes to show

cause why they should not be held in contempt. On

September 30, the bankruptcy court ordered Mr. Diaz to

submit to a deposition and produce documents relevant to his

and Ms. Barba de la Torre’s attempts to comply with the

ACJ. At his deposition, Mr. Diaz testified that counsel had

advised him that signing the transfer documents would violate

Mexican law. He also testified that, pursuant to advice of

counsel, he sought to enjoin transfer of the Villa interest

through an amparo — a Mexican proceeding to ensure that an

individual’s constitutional rights are not violated by a

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IN RE: ICENHOWER 9

Mexican official. The Diazes also submitted declarations

from two of their attorneys stating that Mexican law

prevented them from complying with the ACJ.

Arguing that these statements waived attorney-client

privilege, Kismet moved on October 15 to compel discovery

of communications with counsel regarding the

“impossibility” defense or correspondence with Mexican

officials. The bankruptcy court granted Kismet’s motion on

October 22. The Diazes produced responsive documents on

November 7.

C. The Diazes’ continued delay and obstruction.

The disclosed documents indicate that, rather than make

a good faith effort to comply with the ACJ, the Diazes sought

to delay and obstruct its implementation. On September 8,

Mr. Diaz told his counsel: “I will not sign anything that

executes a trust agreement . . . . I will not cooperate with

these brigands, making a mockery of [M]exican law and

attempting to circumvent it.” Mr. Diaz’s counsel responded:

I understand that but we don’t need to reveal

it to [Kismet’s counsel] yet. Better to let him

think we are preparing to cooperate while we

get our ducks in a row in Mexico. Therefore,

[to] the extent [we] can point to defects, we

can send back the draft document and make

them change it again causing delay.

In another email, Mr. Diaz’s counsel noted that her objection

to a proposed transfer document “should throw a wrench in

the works.”

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One means by which the Diazes sought to obstruct the

bankruptcy court’s judgment was by soliciting intervention

by Mexican officials. As Mr. Diaz’s attorney stated in an

email: “I think the only thing we can do now is work with the

Mexican authorities to try to ensure that the order cannot be

accomplished.” On September 4, Mr. Diaz instructed his

counsel to lobby Ambassador Joel Hernandez Garcia, a legal

advisor in the Mexican Ministry of Foreign Affairs, to sign a

document stating that compliance with the ACJ would be

impossible under Mexican law. The next day, Ambassador

Garcia agreed to sign a more limited form of such a

declaration, omitting any statement that the Diazes would be

subject to penalties in Mexico if they complied with the ACJ.

On August 6, 2008, Mr. Diaz contacted the Ministry of

Foreign Affairs in an attempt to ensure that the Ministry did

not issue a fideicomiso permit to Kismet. On September 26,

the Diazes filed an amparo, seeking to enjoin the transfer of

the Villa interest. In a September 30 email, an attorney for

the Diazes stated that the plan was to keep the amparo a

secret until they had it recorded, and that they would then

want to present the certificate of recording “as an obstacle for

transferring title.” Nonetheless, the amparo was soon

dismissed, as Kismet had not sought to have the ACJ

recognized in Mexico and thus there was no official Mexican

action to enjoin. Finally, the Diazes circulated in Mexico a

narrative highly critical of the bankruptcy judge and

orchestrated radio advertisements denouncing Kismet.

At a hearing on November 13, 2008, the bankruptcy court

held the Diazes in contempt. The court also found that, as a

result of the Diazes’ actions, Kismet was unlikely to receive

a fideicomiso permit. However, a permit would not be

necessary to transfer the Villa interest to Axolotl, a Mexican

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IN RE: ICENHOWER 11

corporation. Thus, the bankruptcy court ordered the Diazes,

within one week, to sign a document transferring the Villa

interest to Axolotl or another assignee of Kismet. The court

ruled that, if the Diazes did not purge their contempt by

November 19, compulsory sanctions would issue at the rate

of $25,000 per day. The court also imposed compensatory

sanctions, retroactive to September 9, of $4,150 per day in

lost rental value and $205.48 per day in lost use of the

property. Finally, the court required the Diazes to payKismet

its attorney’s fees and costs related to preparing documents to

carry out the transfer of the Villa interest.

D. Renewed attempts to effect the transfer.

The transfer was originally scheduled to close in Mexico

on November 19. However, on November 18, the notary

public who had agreed to oversee the transaction suddenly

withdrew, despite having previously approved the transfer

documents. Kismet arranged for a different notary to preside

over the closing, but that notary soon withdrew, as well. She

reported that she had been contacted by an agent of the

Diazes’ counsel who had allegedly been hired to investigate

the transaction. The notary was thus concerned about the risk

to herself if she proceeded with the transaction. Further, she

allegedly believed that every notary in the area had been

contacted that day to ensure that no notary would participate

in the transaction.

On November 20, the bankruptcy court heard argument

on why the transfer had failed to close. The Diazes argued

that the notaries had withdrawn based on legitimate

objections to the transfer, whereas Kismet argued that their

withdrawal was solely due to the Diazes’ intimidation. The

court deferred resolving this dispute until a hearing on

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December 4, but ordered the Diazes to close the transaction

by November 25. To avoid interference with the notary, the

court ordered that Kismet not inform the Diazes of the

notary’s name until the time of closing.

The closing was scheduled for November 25. Prior to

that date, a relative of the Diazes attempted to identify and

influence the notary, though the Diazes disclaimed

involvement. On November 25, but before the transaction

closed, Guillermo Rivera, a close friend of Mr. Diaz, crashed

his truck through the Villa’s gate and, together with his

associates, took the property “hostage.” After the transfer

was executed, counsel for Kismet learned of Mr. Rivera’s

actions and that he refused to leave except pursuant to Ms.

Barba de la Torre’s instructions. Counsel for Kismet

requested the Diazes to instruct Mr. Rivera and his associates

to vacate the Villa, but the Diazes refused.

E. The bankruptcy court’s further rulings.

At a hearing on December 4, the bankruptcy court ruled

that the Diazes were at fault for failing to close the

transaction on November 19. The Court imposed compulsory

sanctions of $25,000 per day, retroactive to November 20,

until the Diazes complied with the ACJ. Rejecting the

Diazes’ argument that they had complied simply by signing

the transfer documents, the court ruled that, if Mr. Rivera had

in fact occupied the property on the Diazes’ behalf prior to

the closing, this would have violated a preliminaryinjunction,

incorporated into the ACJ, which prohibited “making

unavailable . . . any part of the villa property.” Compulsory

and compensatorysanctions would issue until possession was

restored.

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IN RE: ICENHOWER 13

The Diazes vacated the Villa on December 5. On

December 11, the court heard argument and testimony

regarding Mr. Rivera’s occupation of the Villa. At the end of

the hearing, the court found that Mr. Rivera had “invaded”

the Villa prior to the closing in concert with the Diazes. The

court held the Diazes in contempt of the preliminary

injunction, issued compulsory and compensatory sanctions

for the period November 25 to December 5, and granted

Kismet’s application for attorney’s fees from November 25

to December 11.

F. The district court’s order.

On June 15, 2012, the district court issued its decision on

appeal. It found no clear error in the bankruptcy court’s

factual findings and affirmed most of the bankruptcy court’s

rulings. However, it (1) reversed the imposition of $225,000

in compulsory sanctions from November 26 to December 4,

and the imposition of compensatory sanctions for loss of use

of the villa, and (2) vacated the bankruptcy court’s awards of

attorney’s fees and costs and remanded for recalculation of

fees and costs.

II.

This Court’s role in bankruptcy appeals is “essentially the

same” as that of the district court. In re Caneva, 550 F.3d

755, 760 (9th Cir. 2008). We review de novo whether the

bankruptcy court properly exercised jurisdiction,

Mayweathers v. Newland, 258 F.3d 930, 934 (9th Cir. 2001);

whether it afforded the Diazes due process, Thomas, Head &

Greisen Emps. Trust v. Buster, 95 F.3d 1449, 1458 (9th Cir.

1996); and whether it correctly ruled that Mr. Diaz waived

attorney-client privilege, Home Indem. Co. v. Lane Powell

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14 IN RE: ICENHOWER

Moss & Miller, 43 F.3d 1322, 1326 (9th Cir. 1995). We

review for abuse of discretion the bankruptcy court’s finding

of civil contempt and imposition of sanctions. F.T.C. v.

Affordable Media, LLC, 179 F.3d 1228, 1239 (9th Cir. 1999);

Thomas, Head, 95 F.3d at 1458. We review for clear error

the bankruptcy court’s findings of fact in connection with the

civil contempt order. Affordable Media, 179 F.3d at 1239.

III.

The Diazes challenge the bankruptcy court’s rulings on

seven grounds: (1) the bankruptcy court lacked jurisdiction to

substitute Axolotl as transferee, (2) the bankruptcy court

violated due process in imposing certain sanctions, (3) the

ACJ was not sufficiently specific to support a finding of

contempt, (4) Mexican law rendered compliance with the

ACJ impossible, (5) the bankruptcy court’s findings of

contempt for the period up to November 25 were clearly

erroneous, (6) the bankruptcy court lacked jurisdiction to

quantify fees and costs in its order of December 18, 2008, and

(7) the bankruptcy court improperly abrogated attorney-client

privilege. Kismet cross-appeals on a single ground: that the

district court erred in vacating the compulsory sanctions

imposed for the period from November 26, 2008, to

December 4, 2008. We consider these issues in turn.

A.

We first consider the Diazes’ argument that the

bankruptcy court lacked jurisdiction to substitute Axolotl as

transferee on November 13, after the ACJ was appealed on

August 6. After an appeal is filed, a court generally may not

“alter or expand upon the judgment.” In re Padilla, 222 F.3d

1184, 1190 (9th Cir. 2000). However, a court retains

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IN RE: ICENHOWER 15

jurisdiction to supervise a required course of conduct. See

Hoffman v. Beer Drivers & Salesmen's Local Union No. 888,

536 F.2d 1268, 1276 (9th Cir. 1976) (holding that a trial court

retains jurisdiction to modify an injunction post-appeal

“where the court supervises a continuing course of conduct

and where as new facts develop additional supervisory action

by the court is required”); Meinhold v. U.S. Dep't of Def.,

34 F.3d 1469, 1480 n.14 (9th Cir. 1994) (holding that court

retained jurisdiction to expand injunction, despite pending

appeal, where court was serving supervisory role).

Here, even if substitutingAxolotl as transferee constituted

altering or expanding upon the ACJ, it was within the

bankruptcy court’s retained jurisdiction to supervise the

course of conduct mandated in the judgment, namely

transferring the Villa interest to Kismet (or its assignee). The

Diazes had taken action to obstruct this transfer, and the

bankruptcy court reasonably concluded that “Kismet would

have precious little success in getting a permit for a

Fideicomiso trust in Mexico.” To account for these changed

facts, the bankruptcy court ordered the Villa transferred to

Axolotl, which, as a Mexican corporation, could receive the

property without using a fideicomiso. This order was within

the court’s jurisdiction.

B.

We next consider the Diazes’ argument that the

bankruptcy court’s contempt and sanctions orders, except

those based on evidence submitted at the December 11

hearing regarding conduct starting on November 25, violated

due process since they were issued solely based on affidavits. 

Ordinarily, courts “should not impose contempt sanctions

solely on the basis of affidavits.” Peterson v. Highland

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Music, Inc., 140 F.3d 1313, 1324 (9th Cir. 1998). However,

once an alleged contemnor’s noncompliance with a court

order is established, the burden shifts to the alleged

contemnor to “produce[] sufficient evidence of [its] inability

to comply to raise a question of fact.” United States v.

Rylander, 656 F.2d 1313, 1318 (9th Cir. 1981), rev'd on other

grounds, 460 U.S. 752 (1983). If the alleged contemnor does

not raise a question of fact through affidavits, and does not

seek the opportunity to present its defense through live

testimony, a court does not violate that party’s due process

rights by holding it in contempt solely based on affidavits. 

See Thomas, Head, 95 F.3d at 1458 (holding that contempt

order did not violate due process where, although district

court did not hold evidentiary hearing, contemnors “had

ample notice and an opportunity to respond to the possibility

that the court would find them in contempt” and did not

request an evidentiary hearing); Donovan v. Mazzola,

716 F.2d 1226, 1240 (9th Cir. 1983) (affirming contempt

order issued after show cause hearing in which contemnors

could have, but did not, present testimony regarding their

inability to comply with order).

Here, there was no dispute that, prior to executing the

transfer documents on November 25, 2008, the Diazes did not

comply with the ACJ. The Diazes thus bore the burden of

showing their inability to comply. In seeking to discharge

this burden, the Diazes did not raise an issue of fact through

affidavits. Nor did they submit, or ask to submit, oral

testimony. But not for lack of opportunity. At the November

13 hearing, Kismet called Mr. Diaz to testify, and there is no

indication that the Diazes could not have called witnesses, as

well. At the December 4 hearing, the Diazes could also

presumably have called witnesses, and they admit that they

did not ask that the hearing be continued to allow for a fuller

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IN RE: ICENHOWER 17

evidentiary presentation regarding the ordered sanctions. 

Neither have they argued that there are witnesses they would

have called had the bankruptcy court permitted it. Having

failed to raise an issue of fact through documentary evidence

or to seek to discharge their burden of production through live

testimony, the Diazes cannot now argue that the bankruptcy

court deprived them of due process.

C.

We turn now to the Diazes’ argument that the ACJ was

insufficiently specific to support a finding of contempt. A

party may be held in civil contempt only if it “violated a

specific and definite order of the court.” Dyer, 322 F.3d at

1191 (quoting In re Bennett, 298 F.3d 1059, 1069 (9th Cir.

2002)).

Here, the ACJ was sufficiently specific. Although the

bankruptcy court left it to the parties to determine which steps

were necessary under Mexican law to create a fideicomiso, it

nonetheless ordered the Diazes to undertake a specific and

definite course of conduct: to transfer the Villa interest to

Kismet or its assignee. There was also no ambiguity

regarding the proper beneficiary of the fideicomiso. “[A]

party may freely assign the proceeds of his judgment or the

value of his recovery,” Pony v. Cnty. of L.A., 433 F.3d 1138,

1144 (9th Cir. 2006), and here, Kismet assigned the benefit

of the judgment to Axolotl. Thus, even before it was

explicitly ordered on November 13, the Diazes knew they

could comply with the ACJ by transferring the Villa interest

to Axolotl.

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D.

We next consider the Diazes’ argument that Mexican law

rendered compliance with the ACJ impossible. Citing

authority from outside this Circuit, the Diazes argue that a

party may not be held in contempt if compliance with the

court’s order would require violating the laws of a foreign

country. See Remington Rand Corp.-Del. v. Bus. Sys. Inc.,

830 F.2d 1260 (3d Cir. 1987); Kilbarr Corp. v. Bus. Sys. Inc.,

B.V., 990 F.2d 83 (3d Cir. 1993).

Even if this rule applied in this Circuit, the Diazes have

not shown that compliance with the ACJ would violate

Mexican law. For one, this Court held in Brady v. Brown,

51 F.3d 810 (9th Cir. 1995), that a similar order, requiring

defendant to execute a power of attorney so that his Mexican

property could be conveyed to a fideicomiso for plaintiff’s

benefit, “did not violate Mexican law.” Id. at 819. Moreover,

although a permit from the Ministry of Foreign Affairs is

necessary to create a fideicomiso, the ACJrespected Mexican

fideicomiso procedures: it ordered the Diazes to take all

actions necessary, according to Mexican law, to create a

fideicomiso, and the court “expressly retain[ed] continuing

jurisdiction in [the ACJ] ‘to consider alternative remedies if

the trust [could not] be established under Mexican law.’”

The Diazes argue that the ACJ could be enforced in

Mexico only if it were officially recognized, or homologated,

according to Mexican law. But the ACJ did not need to be

enforced in Mexico: the bankruptcy court’s in personam

jurisdiction over the Diazes empowered it to issue an order,

enforceable in the United States, requiring the Diazes to take

action abroad. See Ramirez & Feraud Chili Co. v. Las

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IN RE: ICENHOWER 19

Palmas Food Co., 146 F. Supp. 594, 604 (S.D. Cal. 1956),

adopted by 245 F.2d 874 (9th Cir. 1957) (per curiam).

The Diazes also argue that fideicomisos are voluntary

agreements and are unenforceable if entered into from the

coercion of a foreign government. However, the ACJ does

not require that the conveyance documents be enforceable,

only that the Diazes sign them. As the bankruptcy court

noted, “Once [the] transfer documents are executed, [the

Diazes] are free to challenge them in Mexico. . . . They have

complied with this Court’s order at that point.”

Finally, the Diazes argue that signing the conveyance

documents would expose them to liability for falsely

representing that they were acting voluntarily. Critically,

though, the declaration of Ambassador Garcia of the Ministry

of Foreign Affairs does not state that signing the fideicomiso

would subject the Diazes to liability. Nor do other documents

from the Ministry. Moreover, even if the Diazes are correct

that a foreign court order constitutes duress under Mexican

law, it seems highly unlikely, and the Diazes have not shown,

that the object of duress is subject to liability for submitting

to it. In short, even if “legal impossibility” excuses

noncompliance, the Diazes have not demonstrated that

compliance with the ACJ was legally impossible.

E.

The Diazes argue that the bankruptcy court’s findings of

contempt for the period up to November 25 are clearly

erroneous. However, there is no question that, prior to

executing the conveyance documents on November 25, the

Diazes did not comply with the ACJ. To avoid contempt, the

Diazes needed to show that, although they had taken all

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20 IN RE: ICENHOWER

reasonable steps to comply, compliance was impossible. See

Stone v. City & Cnty. of S.F., 968 F.2d 850, 856 (9th Cir.

1992); Rylander, 656 F.2d at 1318. Yet, the record reflects

actions by the Diazes to delay compliance. Thus, the findings

of contempt are not clearly erroneous.

F.

Although the Diazes argue that, in light of their appeal of

December 10, the bankruptcy court lacked jurisdiction to

enter its order of December 18, quantifying fees and costs

awarded in its order of December 4, this issue is moot. The

December 18 order was vacated by the district court, and

Kismet has not appealed this part of the district court’s order.

G.

We turn now to the Diazes’ challenge to the bankruptcy

court’s order abrogating Mr. Diaz’s attorney-client privilege

with respect to “all documents that refer or relate to

communications with or by counsel (a) regarding the defense

of ‘impossibility’ to a sanction of contempt; (b) regarding

correspondence with or from any Mexican government

official in regards to the [ACJ].”

This order was not error. The crime-fraud exception to

attorney-client privilege applies when “the client was

engaged in or planning a criminal or fraudulent scheme when

it sought the advice of counsel to further the scheme,” and

where “the attorney-client communications for which

production is sought are ‘sufficiently related to’ and were

made ‘in furtherance of [the] intended, or present, continuing

illegality.’” In re Napster, Inc. Copyright Litig., 479 F.3d

1078, 1090 (9th Cir. 2007), abrogated on other grounds by

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IN RE: ICENHOWER 21

Mohawk Indus., Inc. v. Carpenter, 558 U.S. 100 (2009)

(quoting In re Grand Jury Proceedings, 87 F.3d 377, 381–83

(9th Cir. 1996)). Further, “voluntary disclosure of the content

of a privileged attorney communication constitutes waiver of

the privilege as to all other such communications on the same

subject.” Weil v. Inv./Indicators, Research & Mgmt., Inc.,

647 F.2d 18, 24 (9th Cir. 1981); see also Hernandez v.

Tanninen, 604 F.3d 1095, 1100 (9th Cir. 2010).

Here, Mr. Diaz testified at his deposition on October 10,

2008, that his communications with counsel contributed to

(1) his position that signing the power of attorney prepared by

Kismet would violate Mexican law, (2) his decision to contact

the Ministry of Foreign Affairs, and (3) his decision to file

the amparo. This testimony gave the bankruptcy court

reasonable cause to believe that Mr. Diaz consulted his

attorneys for the purpose of furthering his obstruction of the

ACJ. Additionally, having invoked advice of counsel in

support of his position regarding Mexican law and his

argument that contacting the Ministry and seeking the

amparo were consistent with compliance with the ACJ, Mr.

Diaz implicitly waived privilege with regard to

communications on those subjects.

H.

Finally, we consider Kismet’s argument that the district

court erred in vacating the compulsory sanctions of $25,000

per day for the period from November 26, 2008 (the day after

the transfer) to December 4, 2008 (when the bankruptcy court

put the Diazes on notice that continued occupation of the

Villa would result in daily compulsory sanctions). Before

compulsory sanctions may be imposed, a contemnor must

have an “opportunity to reduce or avoid the fine through

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22 IN RE: ICENHOWER

compliance.” Int'l Union, United Mine Workers of Am. v.

Bagwell, 512 U.S. 821, 829 (1994). Thus, at the least, a

contemnor must be given notice that it will face compulsory

sanctions if it fails to take a particular action. See id.

Here, even if occupation of the Villa violated the

bankruptcy court’s preliminary injunction, which was

incorporated into the ACJ and prohibited “making

unavailable . . . any part of the villa property,” the Diazes

were not adequately put on notice until December 4 that

continued occupation of the Villa would trigger compulsory

sanctions. On November 13, 2008, the bankruptcy court

ordered compulsory sanctions if the Diazes did not “sign such

documents as proffered by [Kismet] . . . [that] show[] a

transfer to Axolotl or other assignee that Kismet may

designate.” Although, on November 20, the bankruptcy court

prohibited the Diazes from “tak[ing] any steps to render

ineffectual . . . the conveyance document,” the court did not

notify the Diazes that violating this order would subject them

to compulsory sanctions. In any event, the conveyance

document was not rendered wholly ineffectual, as it still

transferred legal title and permitted Axolotl to invoke

Mexican law to protect its property interests. In fact, the

bankruptcy court had explicitly recognized that it was

concerned with the transfer of title, not securing possession:

[I]f [occupants of the Villa are] there by the

time the thing closes, this is something you

may have to deal with on a post-closing

basis. . . . [T]he Court is not going to be

decidingwhat would eventuallybe an eviction

proceeding of property in Mexico. Once your

client has rights under the transfer documents,

your client has whatever rights are conferred

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IN RE: ICENHOWER 23

under Mexico law. This is not the Court’s

concern.

Not until December 4, when Kismet notified the court of the

occupation and compulsory sanctions were imposed until it

ended, were the Diazes given an opportunity to avoid

sanctions by vacating the Villa.

IV.

The parties have submitted several requests for judicial

notice. Judicial notice may be taken “at any stage of the

proceeding.” Fed. R. Evid. 201(d). We “may judicially

notice a fact that is not subject to reasonable dispute because

it . . . can be accurately and readily determined from sources

whose accuracy cannot reasonably be questioned,” Fed. R.

Evid. 201(b), including “court filings and other matters of

public record,” Reyn's Pasta Bella, LLC v. Visa USA, Inc.,

442 F.3d 741, 746 n.6 (9th Cir. 2006). We “must take

judicial notice if a party requests it and the court is supplied

with the necessary information.” Fed. R. Evid. 201(c).

Here, the Diazes have requested judicial notice of two

notices of appeal filed in the bankrutcy court, and Kismet has

requested judicial notice of the Diazes’ emergencymotion for

a stay of judgment pending appeal and the district court’s

order denying that motion. Each of these requests is

unopposed. Kismet has also requested judicial notice of the

notarized transfer document executed on November 25, 2008. 

Although the Diazes challenge the accuracy of the submitted

document, their challenge lacks substance. They state merely

that the document’s accuracy “can be — and is hereby —

reasonablyquestioned”; they do not contend that the Spanishlanguage document is not what they signed on November 25

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or that the document was mistranslated. In fact, they rely

extensively on the translation in arguing that the document

favors their case. We grant each of the requests for judicial

notice.

AFFIRMED.

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