UNITED STATES DISTRICT COURT

SOUTHERN DISTRICT OF OHIO

WESTERN DIVISION

UNITED STATES OF AMERICA, 

Plaintiff, 

and

HOUSING OPPORTUNTIES MADE 

EQUAL, INC.

Plaintiff-Intervenor,

v. 

JOHN KLOSTERMAN and SUSAN 

KLOSTERMAN,

Defendants.

CASE NO.: 1:18CV194

MOTION TO ENFORCE THE CONSENT DECREE 

I. INTRODUCTION

On October 1, 2020, this Court entered a Consent Decree (“Decree”) to enjoin and 

remedy John Klosterman’s pattern or practice of sexually harassing tenants at his residential 

rental properties. Decree, ECF No. 92. As explained in more detail below, since that date, 

Defendants have violated the Decree repeatedly, often by Defendant John Klosterman’s own 

admission. Specifically, among other things: Defendants misrepresented their ownership of 

rental properties in the Decree, John Klosterman continues to personally manage rental 

properties and communicate with tenants and prospective tenants, Defendants failed to retain an 

Independent Manager to manage their properties, Defendants and their agents have not 

completed Fair Housing Act training, and Defendants have not provided proof that they have 

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deposited $10,000 in monetary damages into an escrow account. Because the United States’ 

repeated efforts to obtain Defendants’ compliance have been unsuccessful, the United States now 

moves the Court to enforce the Decree and award other appropriate relief.

II. BACKGROUND

The Decree: (1) requires Defendants to accurately represent and update the extent of their 

rental property holdings; (2) prohibits Defendant John Klosterman from continuing to personally 

interact with tenants or otherwise participate in the rental management business; (3) requires

Defendants to turn over the management of any rental properties they own outside of the 

receivership created as a result of a lawsuit filed by the City of Cincinnati (“the Receivership”)1

or later acquire to an independent property manager (“Independent Manager”); (4) requires 

Defendants and their agents to obtain fair housing training and that Defendants ensure the 

adoption and implementation of a sexual harassment policy at their properties; and (5) requires 

Defendants pay $177,500 in monetary damages and civil penalties. Decree, ECF No. 92, at ¶¶11-

39, PageID 4980-86. As explained in more detail below, Defendants failed to fully comply with 

any of these provisions. 

Defendants’ violations of the Decree are particularly egregious given that John 

Klosterman’s harassment of female tenants continued long after the United States filed its 

lawsuit and even after this Court entered the Decree. On September 17, 2020, the State of Ohio 

1 On August 14, 2019, the City of Cincinnati filed a complaint in the Court of Common Pleas to collect fees, fines, 

and other costs related to extensive violations of the Cincinnati Municipal Code and subsequent code enforcement 

efforts at rental properties owned by Defendants. City of Cincinnati v. John Klosterman, et al., Case No. A1905588. 

On February 14, 2020, the court placed a number of the specified properties under the Receivership. Id., Order 

Appointing Receiver. Although Defendants represented to the United States at the time of the settlement that they 

had no rental properties outside of the Receivership, in fact five of their rental properties were at the time and still 

remain outside of the Receivership, properties which are subject to the provisions of this Decree. See infra at 4-5. 

Except for one document noted below, the United States has not attached copies of state court filings cited in this 

Motion, in an effort not to burden the Court or parties with voluminous exhibits. If the Court or parties wish to 

receive copies of any additional state court filings, however, the United States will promptly provide such copies.

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filed a Menacing by Stalking charge against John Klosterman, based on allegations that he 

“showed up at [the victim’s] residence unannounced and uninvited, likewise he has come to her 

place of employment unannounced and uninvited. . .. [and] followed her in his car,” Ohio v. 

Klosterman, Case No. 20CRB17905, Affidavit, Sept. 17, 2020, and said “odd things to her.” Id., 

Complaint, Sept. 17, 2020. The victim was, until at least around April 2021, a tenant in one of 

Defendants’ properties that is outside of the Receivership but for which John Klosterman has not 

retained an Independent Manger. On November 5, 2020, the State filed a second Menacing by 

Stalking charge based on allegations that, on November 2, 2020, a month after this Court entered 

the Decree and with regard to the same female tenant, John Klosterman “continued to show up at 

the victim’s employment causing her to be in fear for her safety.” Ohio v. Klosterman, Case No. 

20CRB21168, Complaint, Nov. 2, 2020. 

Additionally, on at least four separate occasions, John Klosterman violated the conditions 

of his bond that issued as a result of the Menacing by Stalking charges described above by 

interacting with—and in one instance attempting to evict—the victim. On October 2, 2020, the 

day after this Court entered the Decree, a Municipal Judge revoked John Klosterman’s bond after 

finding that he violated its terms by contacting the victim by text message. See Ohio v. 

Klosterman, Case No. 20 CRB 17905, Judge’s Sheet, Journal Entry – Mittimus, Exhibit 1, at 45; 

id., Bond Revocation, Oct. 2, 2020. On October 20, 2020, a Municipal Judge found that John 

Klosterman again violated the terms of his bond, see Exhibit 1, at 41 (imposing new bond 

conditions), by “send[ing] a letter . . . attempting to terminate the victims’ lease while a 

protection order is in place.” See id., Bond Revocation, Oct. 19, 2020. On November 13, 2020, a 

Grand Jury indicted John Klosterman for a misdemeanor violation of a protective order, Ohio v. 

Klosterman, Case No. B2005843, Indictment for Violating a Protection Order, Nov. 13, 2020,

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finding that John Klosterman’s conduct that resulted in his second Menacing by Stalking Charge 

also violated the terms of the protection order that issued as a result of the first charge (John 

Klosterman’s third such violation). See Ohio v. Klosterman, Case No. 20CRB21168, Complaint, 

Nov. 5, 2020. Finally, on June 24, 2021, the State filed a Motion to Revoke Bond alleging, 

among other things, that John Klosterman “has continued to engage in activities designed to 

harass and intimidate the [victim],” and that he “is attempting to retaliate against the victim by 

and through her connection with the property manager” that manages Defendants’ properties 

under the Receivership. Ohio v. Klosterman, Case No. 20CRB17905, State’s Motion to Revoke 

Bond, June 24, 2021. Currently, the victim resides in one of Defendants’ properties under the 

Receivership. The motion also alleged that John Klosterman has been communicating with other 

tenants. Id. On July 7, 2021, a Municipal Judge found that John Klosterman again violated the 

court’s orders and raised his bond. Id., Judge’s Sheet, Journal Entry – Mittimus at 3. 

The United States’ investigation of Defendants’ compliance with the Decree, coupled 

with the revelations from the State’s actions, have revealed that Defendants engaged in numerous 

and extensive violations of the Decree, which are detailed below. 

A. The Defendants Failed to Inform the United States of Five Rental Properties 

They Own and Manage

Decree ¶10 states as follows: 

Defendants affirm that they do not own, lease, or control any rental properties, 

with the exception of properties under receivership in City of Cincinnati v. John 

Klosterman, et al., Hamilton County C.P. Case No. A1905588 (the 

“Receivership”).

Decree, ECF No. 92, at PageID 4890. The United States relied on this representation—which it 

has since discovered was false—in negotiating the terms of the settlement and monitoring 

Defendants’ compliance with the terms of the Decree. Additionally, paragraph 11 of the Decree 

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requires Defendants to inform the United States if they acquire an interest in any residential 

rental property. Id.

John Klosterman admitted to the United States that, contrary to Defendants’ 

representation in the Decree, he has, “for over a decade,” also owned at least five other 

properties that were not in the Receivership: 621, 623, 634, 787, and 801 Delhi. Exhibit 2 at 3.

John Klosterman acknowledged conducting rental activities at these properties and stated that he 

“retained properties that the City failed to attach [to its] judgment,” and that he intended to use 

“the income generated from the units” to satisfy the judgment in this case. See id. at 2. Because 

of Defendants’ misrepresentations in the Decree to the United States and to this Court, the 

United States believed that all of the Defendants’ rental properties were under the Receivership

for over four months from the date of the Decree, an understanding that informed the United 

States’ monitoring of Defendants’ compliance with the Decree.

B. John Klosterman Has Continued to Actively Manage Rental Properties,

Including Continuing to Communicate with Tenants and Prospective Tenants, in 

Violation of the Decree.

Paragraph 12 of the Decree permanently enjoins John Klosterman from engaging in any 

property management responsibilities, including any activities that involve or may involve 

contact with tenants or prospective tenants, such as renting apartments and collecting rent. 

Decree, ECF No. 92, at PageID 4981. Additionally, paragraph 20 permanently enjoins 

Defendants from “contacting or communicating . . . with former or prospective tenants” of their 

rental properties. Id. at PageID 4983. “‘Contact or communications’ includes, but is not limited 

to, physical contact, verbal contact, telephone calls, e-mails, faxes, written communications, text 

or instant messages, contacts through social media, or other communications made through third 

parties.” Id.

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John Klosterman admitted in communications with the United States that he was recently 

involved in rental negotiations with at least one prospective tenant. Exhibit 2 at 6. Additionally, 

he stated in a subsequent email that he personally “instructed the 2 tenants at 801 Delhi to send 

rents via money order until I have found a new manager.” Exhibit 3. John Klosterman also 

admitted that he engaged a tenant and later a prospective tenant to perform property management 

responsibilities. Exhibit 2 at 3-6. And the State of Ohio’s charges allege additional instances of 

John Klosterman’s property management and communication with a tenant. See supra at 3-4.

John Klosterman admitted to the United States that “I knew that I would have nothing to 

do with tenants” as a result of the Decree, and that he “agreed wholeheartedly” with this 

requirement. Exhibit 2 at 2. And yet by his own admission he undertook property management 

responsibilities—and is still undertaking property management responsibilities—in knowing and 

willful disregard of the Decree. See supra at 3-4.

C. Defendants Failed to Retain an Independent Manager Approved by the United 

States to Manage their Properties, in Violation of the Decree. 

The Decree requires that, for any properties owned by Defendants outside of the 

Receivership, Defendants must “retain an Independent Manager, to be approved in writing by the 

United States, to perform all property management duties. . . .” Decree, ECF No. 92, at ¶13, 

PageID 4891. The Decree defines an “Independent Manger” as “an individual or entity 

reasonably experienced in managing rental properties and who has no current or past 

employment, financial, contractual, personal, or familial relationship with Defendants.” Id. 

Additionally the Decree requires the Defendants to ensure that the Independent Manager 

performs eight specific functions designed to prevent future discrimination at any property 

owned by Defendants, such as implementing a policy against sexual harassment, providing the 

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United States with tenant lists, and notifying the United States about potential violations of the 

Decree. Id., at ¶16, PageID 4981-82. 

Defendants have not retained an Independent Manager at any time since the entry of the 

Decree on October 1, 2020. John Klosterman asserts that he has engaged with at least five 

property managers since August 1, 2020: NCN Property Maintenance (“NCN”) (August 1, 2020 

to November 2020); Zell Hatfield (in or around November 2020 to March 3, 2021); Amy 

Mcintire (beginning March 6, 2021 end date unknown); Sharri Rammelsburg (beginning April 

2021, end date unknown); and Judy Tausch (beginning on or around June 24, 2021). See Exhibit

2 at 3-6; Exhibit 3; Exhibit 4. 

None of these purported property managers were ever proposed by Defendants, much 

less approved by the United States as an Independent Manager, and Defendants have offered no 

proof that any of them have implemented the policies and practices required by paragraph 16 of 

the Decree. EFC No. 92, at PageID 4982.

2 For example, none of these individuals ever provided 

the United States with tenant lists or informed the United States that John Klosterman violated 

the Decree. See Decree, ECF No. 92, at ¶16, PageID 4981-82. Additionally, John Klosterman

admitted that Ms. Hatfield is a current tenant and Ms. Mcintire was a prospective tenant of the 

Defendants. Exhibit 2 at 4-6. Their status as tenants, particularly in light of the prohibitions on 

John Klosterman having contact with tenants and prospective tenants, precludes either from 

serving as the Independent Manager required by the Decree. Further, after Defendants 

unilaterally appointed Ms. Rammelsburg to be their property manager (without seeking approval 

from the United States as the Decree required), the United States interviewed her and determined 

2 John Klosterman’s March 5 Letter states that Defendants’ manager—who was not an Independent Manager 

approved by the United States—would be posting “Posters” by March 8, 2021. Exhibit 2 at 6. It is possible that 

these are the “Equal Housing Opportunity” posters required by Decree ¶16(c). The United States has not received 

confirmation regarding the content of these posters, or that they were actually posted. 

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that she was unqualified to serve as an Independent Manager because, by her own admission, she 

was performing some—but not all—property management functions as a personal favor based on 

her friendship with John Klosterman. Exhibit 5 at 4-5. 

Finally, as John Klosterman noted when he informed the United States that Judy Tausch 

would manage his rental properties, she is John Klosterman’s sister. Exhibit 4. This personal 

relationship with the Defendants precludes her from serving as the Independent Manager. See 

Decree, ECF No. 92, at ¶13, PageID 4981. Additionally, the State of Ohio alleges in its most 

recent Motion to Revoke Bond that Ms. Tausch, at John Klosterman’s direction, interfered with 

the Receivership by posing as an “investor” interested in the properties and speaking with a 

tenant. Ohio v. Klosterman, Case Nos. 20CRB17905, 20CRB18773, 20CRB19488, 

20CRB21069A, B, 20CRB21168, Motion to Revoke Bond, June 25, 2021.

D. Neither Defendants nor Their Agents Completed Fair Housing Act Training,

as Required by the Decree. 

The Decree requires that Defendants complete Fair Housing Act training approved by the 

United States within 30 days of obtaining ownership of rental properties outside of the 

Receivership. Decree, ECF No. 92, at ¶22, PageID 4983. And it also requires that Defendants’ 

employees and agents complete Fair Housing Act training within 30 days of commencing their 

responsibilities. Id. at ¶23, PageID 4983-84. 

Defendants have never sought United States’ approval for any Fair Housing Act training;

nor have they completed Fair Housing Act training. See, e.g., Exhibit 5 at 4. John Klosterman 

indicated to the United States that he “signed up for a course Sexual Harassment [sic] class” 

provided by sexualharassmenttraining.com in January 2021, but never took it. Exhibit 2 at 6. 

Furthermore, contrary to the requirements of the Decree, John Klosterman never sought nor 

obtained approval from the United States confirming that this training satisfies the training 

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requirements of paragraph 22 of the Decree. The United States reviewed the proposed training 

and informed John Klosterman that it did not satisfy the Decree’s terms, because it was limited 

to sexual harassment in the workplace, did not address sexual harassment in housing, and was 

not delivered face-to-face or via video conferencing. Exhibit 5 at 4. Nor have Defendants ever 

taken any steps to obtain approved Fair Housing Act training for Susan Klosterman or any of 

Defendants’ agents or employees. See, e.g., Exhibit 5 at 5. 

E. Defendants Have Not Deposited $10,000 in Damages into an Escrow Account, in 

Violation of the Decree. 

The Decree required Defendants to pay $162,500 up front3 and then to pay an additional 

$15,000 in damages in three instalments of $5,000 by depositing them into an interest-bearing 

escrow account. See Decree, ECF No. 92, at ¶¶27-32, PageID 4984-85. The Decree required 

defendants to deposit the first installment by April 1, 2021, to deposit the second installment by 

July 8, 2022, and to provide proof of each deposit. See id.

On March 29, 2021, contrary to the requirements of the Decree, the Defendants sent the 

United States a check for $5,000. The United States returned this check4 to Defendants and 

requested on multiple occasions that they deposit the money into an escrow account, as required

by the Decree. See, e.g., Exhibit 5 at 8; Exhibit 10 at 3. Despite these requests, Defendants have 

failed to provide any proof to the United States that either of the installment payments due on 

April 1, 2021 and July 8, 2021 have been deposited as specified by the Decree.5 See, e.g., Exhibit

5 at 8; Exhibit 11 at 1.

3 Defendants’ insurer made a majority of this payment on behalf of Defendants. 

4 The United States is unable to receive damages payments from Defendants and transfer them to aggrieved persons. 

5 John Klosterman’s June 24, 2021 letter and July 4, 2021 email assert that he resolved this deficiency and is now in 

compliance. Exhibit 4; Exhibit 6. However, Defendants have not provided the information related to this deposit 

required by the Decree and requested by the United States on multiple occasions. See, e.g. Exhibit 5, Exhibit 10, 

Exhibit 11.

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F. The United States Has Been Unable to Obtain Defendants’ Voluntary 

Compliance with the Decree.

Pursuant to paragraph 46 of the Decree, counsel for the United States made extensive 

good faith efforts to obtain Defendants’ compliance with the Decree. See Decree, ECF No. 92, at 

¶46, PageID 4988. On February 18, 2021, after learning about Defendants’ properties outside of 

the Receivership, the United States informed Defendants of its concerns. Exhibit 7. On March 5, 

2021, John Klosterman responded to the United States’ request for information only in part and 

admitted to violations of the Decree’s key provisions as described above. See Exhibit 2. Despite 

the United States’ request, John Klosterman did not agree to comply with the terms of the Decree 

or provide information to the United States regarding Defendants’ attempts to do so. See id.

The United States responded on April 6, 2021, setting forth in detail Defendants’ 

obligations under the Decree and the areas of their noncompliance and requesting that they take 

specific actions to come into compliance with the Decree’s requirements. Exhibit 5. John 

Klosterman responded on April 23, ignoring a majority of the United States’ requests and, as 

described above, addressing, insufficiently, only Defendants’ failures to secure an Independent 

Manager and deposit $5,000 in monetary damages. Exhibit 8; Exhibit 9. 

On May 6, 2021, the United States responded by letter, again detailing Defendants’ 

deficiencies and requesting compliance with the Decree. Exhibit 10. John Klosterman responded 

by email on May 26, 2021, again ignoring a majority of the United States’ requests and declaring 

that he was communicating with tenants about rent payments and directly collecting rent. Exhibit

3. Despite never addressing a majority of the United States’ concerns, John Klosterman again 

wrote the United States on June 24, 2021, stating that he believed that there were no outstanding 

deficiencies regarding Defendants’ compliance and informing the United States that his sister 

would serve as manager. Exhibit 4. Although the United States once again referred him to its 

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multiple letters regarding Defendants’ deficiencies, John Klosterman emailed the United States 

on July 4, 2021, and again did not provide the information requested. Exhibit 6. 

III. ARGUMENT

Civil contempt may be entered as “a sanction to enforce compliance with an order of the 

court or to compensate for losses or damages sustained by reason of noncompliance.” McComb 

v. Jacksonville Paper Co., 336 U.S. 187, 191 (1949); see also United States v. Bayshore Assocs., 

Inc., 934 F.2d 1391, 1400 (6th Cir. 1991) (“Broadly, the purpose of civil contempt is to coerce 

an individual to perform an act or to compensate an injured complainant.”). To find liability for 

civil contempt, the complainant must “produce clear and convincing evidence,” Elec. Workers 

Pension Trust Fund v. Gary’s Electric Serv. Co., 340 F.3d 373, 379 (6th Cir. 2003), to “establish 

that: a valid, definite and specific order of the court existed; the respondent had knowledge of the 

order; and the respondent violated the order.” Lane v. Lane, No. 20-5399, 2020 WL 9257958, at 

*2 (6th Cir. Dec. 22, 2020) (internal quotation omitted). 

For civil contempt, “the test is not whether defendants made a good faith effort at 

compliance but whether ‘the defendants took all reasonable steps within their power to comply 

with the court’s order.’” Glover v. Johnson, 934 F.2d 703, 708 (6th Cir. 1991) (citing Peppers v. 

Barry, 873 F.2d 967, 969 (6th Cir. 1989). “[A]ll reasonable steps within their power . . . includes 

whether the defendants have ‘marshal[ed] their own resources, assert[ed] their high authority, 

and demand[ed] the results needed from subordinate persons and agencies in order to effectuate 

the course of action required by the [court’s order].’” Gnesys, Inc. v. Greene, 437 F.3d 482, 493 

(6th Cir. 2005) (quoting Glover, 934 F.2d at 708). 

Upon finding contempt, “‘[t]he measure of the Court’s power in civil contempt 

proceedings is determined by the requirements of full remedial relief,’” and “‘may entail the 

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doings of a variety of acts. . . .’” NLRB v. Aquabrom, 855 F.2d 1174, 1187 (6th Cir. 1988) 

(quoting McComb v. Jacksonville Paper Co., 336 U.S. 187, 193 (1949)). Courts have broad 

authority to impose appropriate relief upon finding contempt which will be reviewed only for 

abuse of discretion. Rolex Watch USA, Inc. v. Crowley, 74 F.3d 716, 721 (6th Cir. 1996). 

In addition, a court also has broad, inherent authority to enforce a consent decree it has 

entered, including by ordering remedies necessary to cure the violations. See, e.g., Peacock v. 

Thomas, 516 U.S. 349, 356 (1996). As a general matter, a “federal court’s interest in orderly, 

expeditious proceedings justifies any reasonable action taken by the court to secure compliance 

with its orders.” Gates v. Collier, 616 F.2d 1268, 1271 (5th Cir. 1980) (citation and internal

quotation marks omitted). Where “a right and a violation have been shown, the scope of a district 

court’s equitable powers to remedy past wrongs is broad, for breadth and flexibility are inherent 

in equitable remedies.” Swann v. Charlotte-Mecklenburg Bd. of Educ., 402 U.S. 1, 15 (1971); see 

also Carter-Jones Lumber Co. v. Dixie Distrib. Co., 166 F.3d 840, 846 (6th Cir. 1999) (“[A] 

court of equity has traditionally had the power to fashion any remedy deemed necessary and 

appropriate to do justice in a particular case.”). And the All Writs Act empowers a court to issue 

orders or injunctions “necessary or appropriate to effectuate and prevent the frustration of orders 

it has previously issued in its exercise of jurisdiction otherwise obtained.” United States v. N.Y. 

Tel. Co., 434 U.S. 159, 172 (1977) (quoting 28 U.S.C. § 1651(a)).

For the reasons stated below, the United States respectfully requests that this Court: 

(A) enter a finding of civil contempt against the Defendants; (B) order the Defendants to pay 

monetary sanctions to ensure compliance with the Decree; and (C) order additional injunctive 

relief to enforce the terms of the Decree.

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A. The Defendants Should Be Held in Civil Contempt because They Have 

Repeatedly Violated the Terms of the Decree Despite Repeated Demands for

Compliance.

The Defendants’ repeated and ongoing refusal to comply with the Decree justifies a 

finding of civil contempt in this case. The Decree is “a valid, definite and specific” order of the 

Court of which Defendants had knowledge. Lane, 2020 WL 9257958, at *2. Indeed, the 

Defendants themselves negotiated the terms of the Decree, which inherently “embodies [the] 

agreement of the parties . . . that the parties desire and expect will be reflected in, and be 

enforceable as, a judicial decree.” Frew ex rel. Frew v. Hawkins, 540 U.S. 431, 437 (2004) 

(quoting Rufo v. Inmates of Suffolk Cnty. Jail, 502 U.S. 367, 378 (1992)); see also United States 

v. Armour & Co., 402 U.S. 673, 681 (1971) (“Consent decrees are entered into by parties to a 

case after careful negotiation has produced agreement on their precise terms.”). 

Defendants’ refusal to comply with multiple, significant terms of the Decree, as set forth 

above, demonstrates that the Defendants have violated the order and have not taken “[a]ll 

reasonable steps within their power to comply with the court’s order.” Glover, 934 at 708 

(internal quotation omitted). To the contrary, from the moment they signed the Decree, the 

Defendants concealed their ownership of rental properties outside of the Receivership and have 

since undermined the Court’s injunctive relief. In direct contravention of the Decree’s 

requirements, Defendants have ignored virtually every substantive provision of the Decree, 

despite repeated attempts by the United States to enforce compliance. Since the Decree became 

effective more than nine months ago, Defendants have never retained an Independent Manager 

approved by the United States, continue to engage in numerous property management tasks 

across multiple properties including negotiating apartment rentals and collecting rent, 

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communicate with tenants and prospective tenants, and have never completed Fair Housing Act 

training approved by the United States. 

Although Defendants did set aside $5,000 for their direct payment of monetary damages, 

they failed to make the payment in the manner required by the Decree to ensure that these funds 

will be available to the victims of John Klosterman’s severe and pervasive sexual harassment. 

The United States informed the Defendants of the Decree’s specific requirements for depositing 

this money on two occasions and for providing appropriate verification to the United States, 

instructions which the Defendants initially ignored. Although Defendants now assert compliance 

with this requirement, they have not submitted information to the United States sufficient for the 

United States to confirm that purported compliance, as required by the Decree. 

Defendants’ recalcitrance continues today, despite the United States’ repeated demands

that they comply with the Decree. The Defendants have not denied, and in many cases have 

themselves substantiated, the majority of these allegations. Through their knowing and 

purposeful actions that directly contradict the clear and express terms of the Decree, Defendants 

continue to flout the authority of this Court and its order. A finding of civil contempt is therefore 

warranted in this case, and Defendants should be required to follow the terms of this Decree and 

order of this Court. 

B. The Court Should Assess Monetary Fines to Ensure Compliance with the Decree. 

Among its powers, a court may remedy civil contempt “by fine or imprisonment, or both, 

at its discretion,” for disobedience or resistance to its lawful orders. 18 U.S.C. § 401(3); United 

States ex rel. Shell Oil Co. v. Barco Corp., 430 F.2d 998, 1000 (8th Cir. 1970) (noting 18 U.S.C.

§ 401(3) provides “general statutory authority for . . . both civil and criminal contempt

sanctions”); see also Jaques v. Reiss Steamship Co., 761 F.2d 302, 305 (6th Cir. 1985) (citing 

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Barco, 430 F.2d at 1000). “When a court imposes fines and punishments on a contemnor, it is 

not only vindicating its legal authority to enter the initial court order, but it also is seeking to give 

effect to the law’s purpose of modifying the contemnor’s behavior to conform to the terms 

required in the order.” Int’l Union, United Mine Workers of Am. v. Bagwell, 512 U.S. 821, 828

(1994). 

A contempt fine is considered civil in nature if its purpose is to compensate another party 

for losses sustained or to coerce compliance with a court order. Lane, 2020 WL 9257958, at *2 

(citing Bagwell, 512 U.S. at 829); see also Nye v. United States, 313 U.S. 33, 42 (1941) (noting 

that, unlike the punitive nature of criminal sanctions, civil contempt sanctions are “wholly 

remedial”). A compensatory contempt fine is “based upon evidence of complainant’s actual 

loss.” United States v. United Mine Workers of Am., 330 U.S. 258, 304 (1947); see also Gannett 

Outdoor Co. v. Westland, 875 F.2d 863 (6th Cir. 1989) (compensatory contempt fines are based 

on “complainant’s actual loss”). Disgorgement of profits may be awarded as a compensatory fine 

pursuant to a civil contempt proceeding “to ensure full compensation to the party injured.”

Leman v. Krentler-Arnold Hinge Last Co., 284 U.S. 448, 456. 

A civil contempt fine that is not compensatory must afford “the contemnor . . . an 

opportunity to purge” the contempt. Lane, 2020 WL 9257958, at *2 (citing Bagwell, 512 U.S. at 

829). For example, a “‘per diem fine imposed for each day that a contemnor fails to comply with 

an affirmative court order . . . exert[s] a constant coercive pressure” to obey. Bagwell, 512 U.S. 

at 829; see also Consolidated Rail Corp. v. Yashinsky, 170 F.3d 591, 596 (6th Cir. 1999). The 

contemnor can relieve himself of this financial pressure through full, timely compliance with the 

court’s order. See Bagwell, 512 U.S. at 829. This type of penalty is “designed to compel future 

compliance with a court order,” and so is “considered to be coercive and avoidable through 

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obedience, and thus may be imposed in an ordinary civil proceeding upon notice and an 

opportunity to be heard.” Id. at 827.

In light of the Defendants’ deliberate and prolonged violations of this Court’s Decree, the 

United States respectfully requests that the Court issue an order requiring the Defendants to pay 

prospective contempt fines as follows:

1. pay $100 per day to the United States if, within ten days of this Court’s Order, the 

Defendants have not proposed to the United States a professional Independent Manager who has 

experience with property management and does not have a personal relationship with 

Defendants, pursuant to paragraph 13 of the Decree. Such daily fine shall continue until 

Defendants have made a proposal that complies with the requirements of the Decree.

2. pay $100 per day to the United States if, within ten days of this Court’s order, 

Defendants have not proposed to the United States Fair Housing Act training for Defendants and 

their employees and agents, pursuant to paragraphs 22 and 23 of the Decree. Such daily fine shall 

continue until Defendants have made a proposal that complies with the requirements of the 

Decree. 

3. pay $100 per day to the United States if, within ten days of this Court’s Order, 

Defendants have not deposited the two $5,000 installment payments due on April 1 and July 8, 

2021 into an escrow account and provided proof to the United States in the manner required by 

paragraph 30 of the Decree. Such daily fine shall continue until Defendants have provided the 

required verification. 

4. pay $500 per incident to the United States as a fine for each time following the Court’s 

Order that Defendants engage in property management responsibilities prohibited by the terms of 

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the Decree or communicate with tenants or prospective tenants in violation of the Decree, unless 

there is an emergency that affects the habitability of a tenant’s home. 

C.The Court Should Order Additional Injunctive Relief to Effectuate the Decree.

In addition to requiring Defendants to pay fines if they continue to violate the Decree, the 

Court’s broad remedial powers also give it authority to order additional injunctive relief to 

effectuate the purpose of the Decree and exact compliance. See Swann, 402 U.S. at 15; CarterJones Lumber, 166 F.3d at 846. Therefore, the United States requests that the Court: 

1. Require the Defendants to Identify All of Their Rental Properties.

Because Defendants misrepresented the extent of their rental properties, the Court should 

order the Defendants to provide to the United States, within ten days of its order, a complete list

of all rental properties they have owned, managed, or otherwise controlled since the entry of the 

Decree, verified with a declaration made under penalty of perjury pursuant to 28 U.S.C. § 1746. 

This will ensure that the Court and the United States have a complete list of Defendants’ current 

holdings. 

2. Require the Defendants to Provide an Accounting of Rental Profits.

Because the Defendants falsely represented to the United States and this Court that they 

had no rental properties outside of the Receivership (and therefore no rental income), the Court 

should order Defendants to provide to the United States, within ten days of its order, a full 

accounting of incomes and expenses at all properties owned by Defendants outside of the 

Receivership since October 1, 2020, including bank records, rent receipts, and receipts for any 

expenses for the maintenance of the properties which Defendants maintain should be properly 

deducted from the calculation of profits. After receiving this information, the United States can 

consider whether to move the Court to require Defendants to pay rental profits into a fund for the 

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Independent Manager’s maintenance of the properties, to restore the parties to the position that 

they would have been in but for Defendants’ noncompliance with the Decree and to ensure that 

the funds that would have been available to an Independent Manager for property management 

will be available going forward. 

3. Require the Defendants to Provide Periodic Reports to the Court.

The United States has spent considerable time and effort verifying a panoply of the 

Defendants’ violations of the Decree and exhorting Defendants’ compliance, to no avail. 

However, the duty to comply with this Court’s Decree falls upon the Defendants, not upon the 

Plaintiff, nor upon the tenants who have had no choice but to engage directly with John 

Klosterman despite the Decree’s requirement of an Independent Manager. Accordingly, the 

United States requests that within ten days of this Court’s order, and every sixty days thereafter 

for the duration of the Decree, the Defendants be required to file with the Court a certification 

specifically confirming that they have complied with all Decree requirements and all subsequent 

orders of this Court and articulating the steps they have taken to do so. 

4. Extend the Duration of the Decree by Nine Months, until July 2026.

By mutual agreement of the parties, and as endorsed by the Court, the provisions of the 

Decree were to have been in effect for a period of five years. Decree, ECF No. 92, at ¶42, 

PageID 4988. As recounted herein, the Defendants’ conduct has, in effect, shortened the 

compliance period by at least nine months, measured by the period between October 1, 2020, 

when the Defendants signed the Decree, and July 1, 2021. The Defendants’ actions to 

circumvent this Court’s Order should not be permitted to achieve this result. The Decree itself 

provides that “the United States may move the Court to extend the period in which [the Decree] 

is in effect if one or more Defendants violates one or more terms of the Decree or if the interests 

of justice so require.” Id. On the basis of Defendants’ contemptuous conduct, and to dissuade the 

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Defendants from continued acts of defiance, the United States moves the Court to extend the 

duration of the Decree until July 1, 2026, and to retain jurisdiction until that time. 

IV. CONCLUSION

For the foregoing reasons, the United States respectfully requests that this Court enter a 

finding of civil contempt against the Defendants and impose injunctive relief and sanctions as set 

forth above.

Dated: July 27, 2021

Respectfully Submitted,

VIPAL J. PATEL KRISTEN CLARKE

Acting United States Attorney Assistant Attorney General

Civil Rights Division

 s/Matthew J. Horwitz________________ s/Katharine F. Towt

MATTHEW J. HORWITZ (0082381) SAMEENA SHINA MAJEED

Assistant U.S. Attorney Chief

United States Attorney’s Office TIMOTHY MORAN

Southern District of Ohio Deputy Chief

221 East Fourth Street, Suite 400 KATHARINE F. TOWT (MA 690461)

Cincinnati, Ohio 45205 AMIE S. MURPHY (NY 4147401)

Tel: (513) 684-3711 Trial Attorneys

Matthew.Horwitz@usdoj.gov Housing and Civil Enforcement Section

Civil Rights Division

U.S. Department of Justice

4 Constitution Square

150 M Street, NE, Room 8.1108

Washington, DC 20530

Phone: (202) 305-8196

Fax: (202) 514-1116

E-mail: Katie.Towt@usdoj.gov

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CERTIFICATE OF SERVICE

I certify that on July 27, 2021, a copy of the foregoing Motion to Enforce was filed by 

CM/ECF and will be electronically served on all counsel of record though that system. 

Additionally, on the same date, a copy of the foregoing was served upon Defendants John and 

Susan Klosterman by U.S. mail at the following addresses:

John and Susan Klosterman

5615 Sidney Road

Cincinnati, Ohio 45238

John Klosterman

JMS Number 1732946

Control Number 778594

Hamilton County Justice Center

900 Sycamore Street

Cincinnati, Ohio 45202

A copy was also sent on the same date by electronic mail to johncklosterman@gmail.com.

 s/Matthew J. Horwitz 

MATTHEW J. HORWITZ (0082381)

Assistant U.S. Attorney

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