Opinion ID: 1655639
Heading Depth: 2
Heading Rank: 1

Heading: whether the circuit court erred in awarding sanctions against aussenberg.

Text: ¶ 18. On February 20, 1996, Wittjen filed a motion to compel discovery to interrogatories and requests for production. On October 18, 1996, the circuit court ordered QPI, through Wyssbrod, to report all business transactions of QPI to Wittjen on fourteen-day intervals. Wyssbrod failed to provide a current set of corporate records as ordered by the court, and the circuit judge, by order dated January 16, 1997, found Wyssbrod in willful contempt of court and entered sanctions against him in the amount of $1,000. The order stated that the sanctions were to be paid from Wyssbrod's personal funds rather than the funds of QPI. ¶ 19. On behalf of Wyssbrod, Aussenberg filed a motion for relief from the order granting sanctions against Wyssbrod. To the motion, Aussenberg attached a letter written by him to the circuit court contesting the sanctions. The court ordered all parties and counsel to appear at a status conference on January 30, 1997, for the purpose of addressing the issues raised in Aussenberg's letter. Aussenberg failed to attend the status conference, despite the order of the court. He notified Craig by telephone that he had filed QPI's bankruptcy petition the morning of the status conference and that to attend the status conference would be a violation of the automatic stay. Aussenberg also notified the court of the bankruptcy filing and stated that he would not attend the status conference. The circuit court administrator informed Aussenberg by telephone the morning of the hearing that the circuit judge intended for him to attend the hearing despite the filing of the bankruptcy petition. ¶ 20. The status conference was held, despite the absence of Aussenberg. At the conference, the circuit judge stated that the filing of the bankruptcy petition would not stay proceedings unrelated to the debt. The court found Aussenberg in contempt of court for failure to appear at the hearing. The court rescinded the $1,000 sanction initially placed upon Wyssbrod, and entered a sanction of $1,000 against Aussenberg. ¶ 21. Aussenberg argues that there is insufficient evidence in the record to justify the circuit court's imposition of the $1,000 sanction against him because Wyssbrod's failure to comply with the court's discovery orders was not due to any culpability on his part. Aussenberg's argument centers around the following statements by the circuit judge at the status conference: [L]et me state for the record that it is clear to this Court that Mr. Aussenberg and Mr. Aussenberg alone has counseled and advised his client throughout this entire matter to do everything he could to avoid the orders of the Court, to avoid complying with discovery even after being directed to do so while having motion to compel discovery hearings.... But Mr. Aussenberg has always tried to find a way to go around what the Court has ordered to try to keep one foot in the boundaries of legality and the ethics required of him but yet evade and avoid everything the Court has ordered to do. He filed this action, but then he has done everything he can to keep this from coming to a conclusion and having the Court decide anything.... I believe that Mr. Aussenberg's contempt is direct, direct and continuing to this Court.... ¶ 22. Aussenberg maintains that there is no evidence in the record which suggests that he had any part in counseling his client to disobey the court's discovery orders. Aussenberg points to Wyssbrod's testimony at a January 19, 1999, hearing in which Wyssbrod stated that Aussenberg never advised him not to deliver any records. In his contention that there is no evidence in the record indicating that he counseled his client to disobey discovery orders, Aussenberg is correct. Nevertheless, Aussenberg overlooks the grounds on which the circuit court ultimately sanctioned him. Regardless of the language of the circuit judge regarding Aussenberg's part in Wyssbrod's disregard of the court's discovery order, the order of the circuit court entered pursuant to the status conference clearly states: The hearing was scheduled to address issues raised by Martin Aussenberg in his letter addressed to the Court dated January 24, 1997. Previous to the hearing, the Court was advised by Martin Aussenberg that a bankruptcy petition had been filed in the Bankruptcy Court of the Western District of Tennessee on behalf of Quality Pallets, Inc. Even though the Court, through the Court Administrator, advised Martin Aussenberg to attend the hearing, he chose not to do so under the guise of the bankruptcy filing. This Court does not believe that Martin Aussenberg had a valid reason for failing to appear at the hearing of this cause, and, therefore, finds him in direct contempt of this Court for his failure to appear. (emphasis added). Based upon this finding, the court rescinded the $1,000 sanction placed upon Wyssbrod and placed it upon Aussenberg. ¶ 23. The imposition of punishment for contempt of court is within the discretion of the trial court. Gebetsberger v. East, 627 So.2d 823, 826 (Miss.1993). Mississippi law clearly supports a court's power to sanction an attorney or party for violation of court orders, and, more specifically, for failure to appear as ordered by the court. See Alviers v. City of Bay St. Louis, 576 So.2d 1256 (Miss.1991); Wolf v. State, 260 So.2d 425, 433 (Miss.1972). See also Miss.Code Ann. § 9-1-17 (Supp.2000); U.R.C.C.C. 1.03 & 3.02. Nothing in the record suggests that the circuit court released Aussenberg from his obligation to appear in the circuit court the afternoon of the status conference. In fact, the court administrator informed Aussenberg that the judge expected him at the status hearing, despite the bankruptcy filing that morning. ¶ 24. Aussenberg argues that the circuit court erred by proceeding with the status conference. Aussenberg contends that the automatic stay in effect upon the filing of the bankruptcy petition precluded the circuit court from proceeding with the conference and, apparently, from entering sanctions against Aussenberg. See 11 U.S.C.A. § 362(a) (filing of bankruptcy petition operates as stay against enforcement of judgment or proceedings against debtor or against estate property). Interestingly, Aussenberg apparently wished the circuit court to acknowledge the automatic stay in regard to the status conference, but to disregard it in regard to the motion to dismiss filed on the same day by QPI. See Pope v. Manville Forest Prods. Corp., 778 F.2d 238, 239 (5th Cir.1985) (automatic stay precludes the court from dismissing the proceeding). ¶ 25. We conclude that Aussenberg's view of the automatic stay is overly expansive. The purpose of the automatic stay is to prevent a race to the courthouse to obtain the debtor's assets, and the scope of the stay should be construed no more broadly than necessary to effectuate the purpose of the stay. In re Continental Air Lines, Inc., 61 B.R. 758 (S.D.Tex. 1986). Though the circuit court stayed all progression in this case subsequent to the hearing at issue, the automatic stay imposed by § 362 did not necessarily preclude the court from holding the hearing regarding Wyssbrod's discovery violations. ¶ 26. The automatic stay does not stay the entire proceeding where the debtor is one of several defendants. Neubauer v. Owens-Corning Fiberglas Corp., 26 B.R. 644 (E.D.Wis.1983). The stay generally does not protect persons other than the debtor, such as principals and officers, and does not protect non-bankruptcy co-defendants of the debtor. See Fortier v. Dona Anna Plaza Partners, 747 F.2d 1324 (10th Cir.1984) (does not protect codefendants); Lynch v. Johns-Manville Sales Corp., 710 F.2d 1194, 1196-97 (6th Cir. 1983) (same); In re Philadelphia Gold Corp., 56 B.R. 87 (Bankr.E.D.Pa.1985) (does not protect principals); In re Nashville Album Productions, Inc., 33 B.R. 123 (M.D.Tenn.1983) (does not protect officers). The hearing at issue was held to determine the propriety of sanctions against Wyssbrod, not the debtor in bankruptcy, QPI. The court's order specifically stated that the discovery sanctions were to be paid from Wyssbrod's personal funds, not those of the corporation. Furthermore, the sanctions for contempt at issue here were imposed against Aussenberg, not Wyssbrod nor QPI. ¶ 27. Actions stayed do not include contempt proceedings arising out of disobedience to a state court order made prior to the stay. In re Dumas, 19 B.R. 676, 677 (B.A.P. 9th Cir.Ariz.1982). An act committed in disregard of a court order is a contempt of that court and is within the inherent power of the court to punish. Purvis v. Purvis, 657 So.2d 794, 798 (Miss.1995) (citing Melvin v. State, 210 Miss. 132, 148, 48 So.2d 856 (1950)). Aussenberg knowingly disregarded a court order. He had notice of the hearing before the circuit court and was, in fact, informed by the court administrator the morning of the hearing that the court expected his presence regardless of the bankruptcy petition. He also had notice, prior to the hearing, that the court would not recognize as valid his explanation for not attending the hearing. ¶ 28. Aussenberg also contends that he was not given notice as to the possibility of sanctions being assessed against him. Aussenberg argues that by summarily sanctioning him for contempt, the circuit judge violated Canon 3(A)(4) of the Code of Judicial Conduct, which provides that [a] judge should accord to every person who is legally interested in a proceeding, or his lawyer, full right to be heard according to law.... ¶ 29. This Court has held that where the contemptuous act is directthat is, where it occurs within the presence of the courtthe court is empowered to punish the actor summarily, but where the act is constructivethat is, the act occurred outside the presence of the courtthe court must give the contemnor the procedural protections of notice and a fair hearing. Lawson v. State, 573 So.2d 684, 686 (Miss. 1990); Varvaris v. State, 512 So.2d 886, 887 (Miss.1987); Jordan v. State, 216 Miss. 542, 62 So.2d 886 (1953). ¶ 30. Courts are divided as to whether an attorney's absence is best characterized as contempt in the presence of the court, otherwise known as direct contempt. United States v. Nunez, 801 F.2d 1260, 1264 (11th Cir.1986). See also John E. Theuman, Annotation, Attorney's Failure to Attend Court, or Tardiness, as Contempt, 13 A.L.R.4th 122 (1982). This Court has held that a party's failure to appear in court at the appointed time constitutes constructive contempt. Murrell v. State, 655 So.2d 881, 887 (Miss.1995); Wolf v. State, 260 So.2d 425, 433 (Miss.1972). Likewise, the Fifth Circuit has held that the failure of a lawyer to appear for a trial is not a contempt committed in the presence of the court. Smith v. Smith, 145 F.3d 335, 342 (5th Cir.1998) (citing Nunez, 801 F.2d at 1264). The Ninth Circuit has held that ordinarily an attorney's absence is contempt outside the presence of the court because the contempt consists not in the absence from the courtroom but in the reasons for the attorney's presence elsewhere, and the presence elsewhere was, of course, not in the actual presence of the Court. In re Allis, 531 F.2d 1391, 1392 (9th Cir.1976). See also Thyssen, Inc. v. S/S Chuen On, 693 F.2d 1171, 1175 (5th Cir.1982); United States v. Delahanty, 488 F.2d 396, 398 (6th Cir.1973). ¶ 31. Nevertheless, in the circumstances as they exist in the case at hand, Aussenberg's failure to attend the status conference was properly punished summarily. In Smith, the Fifth Circuit explained that in narrowly defined circumstances, an attorney's absence may be punished without the benefit of notice and a separate hearing. The Court stated, In Thyssen, we noted that there may be a `hypothetical exception' to the general rule that absence can be punished only through Rule 42(b) when the reason for the absence or tardiness is `known to the court.' Id. (citing Thyssen, 693 F.2d at 1175). We explained that this could occur because `[c]ounsel may advise the court that he will not appear for a certain reason, or he may advise the court why he was absent.' Id. (citing Thyssen at 1175; United States v. Baldwin, 770 F.2d 1550, 1555 (11th Cir.1985) (upholding use of summary contempt procedures where the attorney, prior to his absence told the court why he would not be present on April 17, and that he was refusing to obey a court order)). ¶ 32. Aussenberg telephoned the court the morning of the conference and advised the court that he would not attend the conference as ordered. The court administrator informed Aussenberg that the judge expected him to attend the conference and that Aussenberg's reason for not attending the conference would not be recognized as valid by the court. This is distinguishable from instances where an attorney merely fails to appear, which is generally held to be constructive contempt. See Murrell, 655 So.2d at 891 (Pittman, J., dissenting). Procedural protections are provided in cases of constructive contempt because the actions constituting the contempt are not within the knowledge of the court. Varvaris v. State, 512 So.2d at 887-88. Under the facts of this particular case, however, Aussenberg's actions and reasons for his actions were known to the court. The circuit court correctly characterized these actions as direct contempt. As Justice Pittman stated in Murrell, [t]o hold otherwise would encroach upon the court's inherent authority to hold a person in contempt of court for violation of court orders. Id. Therefore, Aussenberg was not entitled to formal notice or a separate evidentiary hearing. ¶ 33. Aussenberg also contends that, should this Court find that the circuit court did not err in ordering sanctions, it should nevertheless find that the sanctions are excessive in light of Miss.Code Ann. § 9-1-17 (Supp.2000), which states in pertinent part: The Supreme, circuit, chancery and county courts and the Court of Appeals shall have power to fine and imprison any person guilty of contempt of the court while sitting, but the fine shall not exceed One Hundred Dollars ($100.00) for each offense, nor shall the imprisonment continue longer than thirty (30) days.... This Court has held that the limits of § 9-1-17 apply only where the sanction is imposed for direct contempt and that the limits do not apply to constructive contempt. Wood v. State, 227 So.2d at 290 (Miss.1969) (citing Melvin v. State, 210 Miss. 132, 48 So.2d 856 (1950)). Since Aussenberg's actions are best characterized as direct contempt, the sanctions imposed by the circuit court must be reduced to the $100 limitation found in § 9-1-17.