Opinion ID: 466263
Heading Depth: 2
Heading Rank: 2

Heading: Validity of the Contempt Order

Text: 19 Although the parties dispute the jurisdiction of the bankruptcy court to issue citations for civil contempt, all agree that a bankruptcy judge has no power to issue a citation for criminal contempt. Such an exercise of the contempt power is specifically prohibited by statute: 20 A bankruptcy court ... may not ... punish a criminal contempt not committed in the presence of the judge of the court or warranting a punishment of imprisonment. 8 21 Therefore, there can be no doubt whatever that if the bankruptcy judge purported to exercise criminal contempt power, or if the order principally reflected an exercise of criminal contempt power, then the court acted without authority. 22 The bankruptcy court did not label this contempt as civil or criminal. 9 Indeed, in its show cause orders, the court threatened Hicks with both civil and criminal contempt, and with possible imprisonment. We must, therefore, look to the nature of the sanctions themselves to determine whether the contempt citation in this case was civil or criminal. The test [for civil or criminal contempt] may be stated as: what does the court primarily seek to accomplish by imposing sentence? 10 Civil contempt sanctions are employed only to coerce compliance with the court's order or to compensate an injured party for losses sustained because of the contemptuous behavior. The sanctions in a civil contempt must not be punitive. 11 23
24 Those sanctions that are designed to coerce compliance are by their very nature conditional sanctions; they only operate if and when the person found in contempt violates the order in the future. If a sanction operates whether or not a party remains in violation of the court order, it obviously does not coerce any compliance. Therefore, the person in civil contempt must be given the opportunity to bring himself into compliance before the sanctions are imposed. 12 In Lance v. Plummer, 13 for example, the Fifth Circuit held that a sanction requiring that an unpaid deputy sheriff give up his badge and cease functioning as a peace officer was not an appropriate civil contempt sanction: 25 [S]ince sanctions imposed in civil contempt proceedings must always give to the alleged contemnor the opportunity to bring himself into compliance, the sanction cannot be one that does not come to an end when he repents his past conduct and purges himself. 14 26 In the instant case, the sanctions clearly did not serve to coerce compliance with the December 7, 1983 order. Even if Hicks put herself in complete compliance with that order, she could not avoid the sanctions. In particular, Hicks was forced to give up her right to consent to any sale of the property made free and clear of all liens, and this sanction was imposed on Hicks without regard to whether she obeyed the December 7, 1983 order. Rather than compel future compliance with the December 7, 1983 order, the contempt sanctions seem clearly designed to punish Hicks for her past disobedience. 27 This conclusion is reinforced by the fact that the sanctions imposed have no apparent connection to the contemptuous behavior. No one at oral argument was able to explain any such connection, and forcing Hicks to forego her statutory right to approve the sale of the property has no logical relationship to her past failure to obtain the Trustee's written approval before listing the property. Although the show cause orders allege that Hicks had also failed to keep the property in good repair and had failed to supply the Trustee with the required appraisals, the bankruptcy court made no findings that Hicks had violated these portions of the order. The sole violation found by the bankruptcy court was Hicks' failure to obtain the Trustee's written approval before listing the property, and that violation was remedied on May 6 when the Trustee entered into a new listing agreement with Hugh T. Peck Properties, Inc.--almost two weeks before the contempt order was issued. 28 It may be that the court was irritated with Hicks or her counsel because of their persistent efforts to protect Hicks' interests. Nevertheless, [i]n the civil contempt setting, the court has no independent interest in vindicating its authority should its orders be violated. 15 In short, it is clear that the court's contempt citation could not coerce Hicks to obtain the Trustee's written approval for a listing because the matter had been fully resolved before the contempt citation issued. We conclude, therefore, that the sanctions in the contempt order could not have been designed to coerce any compliance with the December 7, 1983 order. 29
30 Similarly, we find that the sanctions cannot be defended as compensation to the Trustee for any losses attributable to the contemptuous behavior. Compensatory civil contempt reimburses the injured party for losses and expenses incurred because of the contemptuous conduct. This includes losses attributable to the violation and expenses reasonably and necessarily incurred in the attempt to enforce compliance. 16 The contempt sanctions imposed on Hicks, however, required reimbursement of expenses wholly unrelated to the violation found in this case: 31 Dr. Hicks shall reimburse Trustee for his time expended in the myriad of court hearings and preparations of these hearings, in order to enforce the Court Order of December 7, 1983. Trustee shall be required to provide his statement of time and expenses to this Court and the Court will then enter a separate order quantifying an award to Trustee, that shall be then paid by Florence Hicks, within such time as the court orders in its order awarding fees. 32 On its face, it is plain that the order proposes to reimburse the Trustee for expenses unrelated to Hicks' failure to receive written approval before listing. While only one hearing was devoted to this violation, the contempt order required Hicks to reimburse for the myriad of court hearings and preparations of these hearings to enforce the December 7, 1983 order without regard to whether the myriad hearings and preparations were related to the specific violation found by the bankruptcy court. Even the one hearing held with respect to the listing was originally intended to cover several alleged violations ultimately not even addressed by the bankruptcy court. Moreover, we strongly doubt whether any such expense was necessarily incurred to enforce the December 7, 1983 order. Once the Trustee discovered the existence of the listing agreement, there was no need to use a contempt proceeding to renegotiate a more acceptable listing agreement. In fact, the Trustee himself did not even request a contempt proceeding; instead, the bankruptcy court sua sponte ordered the show cause hearing on several issues--including the listing agreement. Furthermore, even before the contempt order issued, the Trustee was able to negotiate a satisfactory listing agreement with the same broker previously chosen by Hicks. 33 On this record, we cannot possibly find that the contempt order was crafted to compensate the complainant for losses sustained. 17 Indeed, we cannot even find that the Trustee sought compensation for the alleged violation of the court's December 7, 1983 order. 18 A fine imposed by the court in the absence of a motion by the party in interest would transmute the proceeding into a punitive one for criminal contempt.... The effective waiver of the complainant's interest removes the legal basis for imposition of civil contempt. 19 34
35 When cut to its core, the disputed contempt order appears designed solely to serve punitive ends. The purpose of a criminal contempt proceeding is the vindication of the court's authority by punishing for a past violation of a court order. 20 We can find no other purpose here. As we have already shown, the sanctions cannot be defended as either compensatory or remedial in nature. Rather, the sanctions were designed to punish Hicks for her violation of the December 7, 1983 order and, perhaps, for other behavior that the Trustee and the bankruptcy court found irritating, such as Hicks' persistent attempts to remove the automatic stay. With this punitive basis as the sole justification for its action, we find that the bankruptcy court exceeded its statutory authority in attempting to impose sanctions on Hicks for the alleged violation of the December 7 order.