Opinion ID: 732381
Heading Depth: 2
Heading Rank: 3

Heading: Violation of Injunction

Text: 35 The injunction (in both its preliminary and permanent forms) states: 36 The defendant Estate, and its agents, representatives, aiders and abettors are, until satisfaction of the judgment herein, permanently enjoined and restrained from directly or indirectly: 37 (1) transferring, conveying, encumbering, dissipating, converting, concealing, or otherwise disposing of in any manner any funds, assets, claims or other property or assets owned actually, equitably or beneficially by, or in the possession or custody of or held by or in any way on behalf of or for the benefit of the Estate of Ferdinand E. Marcos ...
38 Appellants argue that they are non-parties to this litigation and have not been appointed as personal representatives of the Estate. They argue that their status leaves them powerless to transfer or alienate assets of the Estate, and therefore incapable of being in contempt of an injunction forbidding transfer and alienation. Appellants acknowledge their voluntary substitution as legal representatives of the Defendant Estate for the purposes of defending this action, but argue that in spite of the substitution, they remain non-parties. 39 Appellants' arguments regarding their status as non-parties are without merit. Rule 25(a)(1) of the Federal Rules of Civil Procedure provides that [i]f a party dies and the claim is not thereby extinguished, the court may order substitution of the proper parties. The substituted party steps into the same position as original party. Ransom v. Brennan, 437 F.2d 513, 516 (5th Cir.), cert. denied, 403 U.S. 904, 91 S.Ct. 2205, 29 L.Ed.2d 680 (1971). As properly substituted parties in this case, Appellants obviously are not non-parties. 6 Appellants clearly had notice of, and were subject to, the terms of the injunction.
40 Appellants argue that there is no evidence of the authenticity of the agreements and that mere negotiation and signing of the agreements (without implementation) cannot violate the injunction. 41 The authenticity of the agreements is an established and unchallenged fact found by the district court. The district court has made an unchallenged finding of fact that the Appellants entered into those agreements on behalf of the defendant Estate and themselves as heirs. It is true that the injunction did not explicitly forbid attempts to transfer assets of the Estate. The district court, however, found that the Appellants made a deal with the Republic to transfer and split the Estate assets. The district court was thus well within its discretion in finding that the 1992 and 1993 agreements violated the injunction.
42 Appellants argue that the sale of the art works did not violate the injunction because the artworks were the personal property of Imelda Marcos and did not belong to the Estate. However, an allegation of the Estate's ownership of the art works was included in Hilao's motion for contempt and is consequently deemed established by operation of the discovery sanctions. 43 Appellants also contend that the sale cannot violate the injunction because the art works were sold and the proceeds distributed as part of a consent order entered by Judge Connor to settle an interpleader action in New York in which Imelda Marcos had intervened. Imelda Marcos voluntarily agreed to the consent orders, which provided for the sale of the art works and for distribution of the proceeds according to a settlement agreed upon by the parties in the New York action. Since Imelda Marcos negotiated a settlement and consented to an order that directly violated the injunction without informing Judge Connor of the injunction, she cannot now claim that the consent order was an act of the court which excuses the violation.