Opinion ID: 768048
Heading Depth: 3
Heading Rank: 4

Heading: Consumer Redress

Text: 24 In civil contempt proceedings, a party guilty of contempt may be required to compensate those injured by its contempt. 5 See In re DuPont De Nemours & Co. (Benlate Litigation), 99 F.3d 363, 368 (11th Cir.1996). The district court predicated its assessment of redress for consumer injury against Teri Chierico upon a finding that she engaged in fraudulent telemarketing after signing the Final Judgment. (R4-120-2). Teri Chierico appeals this portion of the order on the basis that she never engaged in telemarketing activity and, accordingly, could not have caused any consumer injury. 25 With no evidence to support its allegation that Teri Chierico engaged in telemarketing activity, the FTC argues alternatively that, in any event, Teri Chierico should be held liable for the payment of consumer redress because she is a conduit ... a sort of fallback position for Michael Chierico whereby he can protect his ill-begotten assets. (1st Supp.R2-361). Pursuant to this reasoning, the FTC requested that the district court order the forfeiture of all of the assets in this case-boat, bank accounts, everything, regardless of whether they belong to Michael Chierico or Teri Chierico. While this argument certainly deepens the pocket from which the FTC can collect, it ignores the fact that a court cannot use its contempt power to acquire assets owned by innocent individuals. Fundamental fairness requires that Teri Chierico not be held liable for consumer redress when she did not participate in any acts which caused harm to consumers. 26 That said, we must now determine what effect Teri Chierico's innocence will have upon the validity of the district court's order that the Chiericos forfeit jointly held property, in particular, their family home. The district court's order mandates that the defendants supply to the FTC a certified check for $2 million to be used for payment of consumer redress. (R4-120-4). The order indicated that the funds for the check shall be supplied through the conversion of any realizable equity in the defendants' home.... (R4-120-4). The family home referenced in the First Contempt Order is owned by Michael and Teri Chierico as tenants by the entirety. 27 This court has already determined that severance of a tenancy by the entirety for the purpose of taking the property owned by a guilty spouse, works a partial taking of the innocent spouse's property. See United States v. One Single Family Residence, 894 F.2d 1511, 1515 (11th Cir.1990). The partial taking results from the fact that [a] tenant by the entireties holds an indivisible right to own and occupy the entire property. Havoco of Am., Ltd. v. Hill, 197 F.3d 1135, 1139 (11th Cir.1999) (internal quotations omitted). To convert that right to own and occupy into a tenancy in common would effect an unlawful taking. See One Single Family Residence, 894 F.2d at 1516. 28 Although One Single Family Residence is a forfeiture case, and Havoco of America, Ltd. is a bankruptcy case, the reasoning of those cases may be readily extended to the civil contempt context. See 197 F.3d at 1139; 894 F.2d at 1512. As tenants by the entireties, this court cannot extract Michael Chierico's rights in the family home without affecting Teri Chierico's rights. Because the district court erred in holding Teri Chierico in contempt, it would be unjust to force her to relinquish any innocently held property rights. Thus, in effect, protection of Teri Chierico's interest in the family home renders Michael Chierico's interest in the home unreachable by the court's contempt power. 29 In conclusion, we must vacate the portion of the district court's First Contempt Order which requires the conversion of Teri Chierico's realizable equity in the family home for the provision of consumer redress. Vacating this aspect of the First Contempt Order necessarily impacts upon the Second and Third Contempt Orders, 6 which hold both Michael and Teri Chierico in contempt for their failure to comply with this limited element of the First Contempt Order. Accordingly, the Second and Third Contempt Orders must be vacated as well. 7