Opinion ID: 2176374
Heading Depth: 2
Heading Rank: 3

Heading: The Contempt Proceeding

Text: After the trial court issued the injunction, the District moved for reconsideration. In denying that motion on May 13, 1992, the trial court also ordered that, if the District does not take immediate steps to effect[] an emergency procurement, this Court will set the matter down for a show cause hearing why the District should not be held in contempt. On May 29, the District issued a new emergency RFP to administer its dental and vision care employee benefit program, and on June 26 the District selected Dental Providers, Inc. as the new program administrator. In the interim, however, GIA had petitioned the trial court on June 10 to issue an order to show cause why the District should not be held in contempt for failure to follow the trial court's order. At a hearing on GIA's petition on June 19, Lorenzo McQueen, a manager in the District Controller's office, testified that the District had delayed in issuing a new RFP because it wanted to rewrite some of the specifications and to contact potential applicants who might be willing to bid on a short term contract. Seven vendors had submitted proposals, and the review committee had made a recommendation on June 17. At the time of the hearing, McQueen was conducting a background check on the winning provider. Later, at a hearing on July 13, the District Controller corroborated much of McQueen's testimony. In particular, the Controller said that he had felt it was important, for the sake of potential bidders, to incorporate into the new RFP a statement of the situation under which this RFP was being issued. The Controller also admitted, however, that even though the District's original letter agreement with QDP had expired as of July 12 (the 183 days had run), he had signed a contract extension permitting QDP to continue to administer the District's benefit plan, so as to allow the new administrator, Dental Providers, sufficient time to gear up its operation. On July 22, 1992, the trial court issued an order holding the District in civil contempt for failure to comply with its injunction. The trial court found, first, that the District was still using QDP's services as of July 13, 1992, notwithstanding the injunction. Second, the court found that the District could have completed the emergency procurement process and installed a new benefits administrator by May 22. Finally, the court concluded that the District had failed to demonstrate either of the two recognized defenses to civil contempt, i.e., substantial compliance or inability to comply. The court ordered the District to pay the sum of $1,500 per day to GIA for each day that the District had continued to use QDP's services between May 22 and July 13, or a total of $78,000. The court also ordered the District to pay GIA $2,000 for each day after July 13 that the District continued to use QDP. Finally, the court required the District to pay GIA's attorney fees incurred in connection with the motion for order to show cause. The District also appeals from this order (No. 92-CV-942).