Opinion ID: 788210
Heading Depth: 2
Heading Rank: 1

Heading: Bankruptcy court's civil contempt power.

Text: 11 We review the bankruptcy court's award of sanctions, including an award of attorneys' fees, for an abuse of discretion. Kord Enters. II v. California Commerce Bank (In re Kord Enters. II), 139 F.3d 684, 686 (9th Cir.1998); Caldwell v. Unified Capital Corp. ( In re Rainbow Magazine), 77 F.3d 278, 283 (9th Cir.1996). 12 Mr. Hansbrough claims that the bankruptcy court abused its discretion in sanctioning him without an evidentiary hearing. Hansbrough appeared before the bankruptcy court numerous times, and was repeatedly told to comply with the Turnover Order or else be sanctioned. He provides no authority for the position that yet another hearing was required, and we are aware of none. 13 To the contrary, it is well established that a bankruptcy court is authorized to exercise civil contempt power: 14 The court may issue any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title. No provision of this title providing for the raising of an issue by a party in interest shall be construed to preclude the court from, sua sponte, taking any action or making any determination necessary or appropriate to enforce or implement court orders or rules, or to prevent an abuse of process. 15 11 U.S.C. § 105(a); see also In re Rainbow Magazine, 77 F.3d 278 at 284. 16 In fact, the prior version of Bankruptcy Rule 9020 provided express authority for the imposition of sanctions for civil contempt of court. While this language has subsequently been deleted, the Advisory Committee Notes to the current Rule explain that the amendment was not intended to curtail a bankruptcy court's ability to impose sanctions for civil contempt: 17 This rule, as amended, does not address a contempt proceeding initiated by the court sua sponte. Whether the court is acting on motion under this rule or is acting sua sponte, these amendments are not intended to extend, limit, or otherwise affect either the contempt power of a bankruptcy judge or the role of the district judge regarding contempt orders. Issues relating to the contempt power of bankruptcy judges are substantive and are left to statutory and judicial development, rather than procedural rules. 18 See also In Re Rainbow Magazine, 77 F.3d 278 at 284-285. 19 In order to find Mr. Hansbrough in contempt, the bankruptcy court had to find that he violated a specific and definite order and that he had sufficient notice of its terms and the fact that he would be sanctioned if he did not comply. See Knupfer v. Lindblade (In re Dyer), 322 F.3d 1178, 1190-91 (9th Cir.2003)(The standard for finding a party in civil contempt is well settled: The moving party has the burden of showing by clear and convincing evidence that the contemnors violated a specific and definite order of the court.). 20 The bankruptcy court ordered Hansbrough to turn over the missing equipment under penalty of contempt on June 12, 2000. Hansbrough refused to do so, and the bankruptcy court held a contempt hearing on January 11, 2001. It again ordered Hansbrough to turn over the equipment, and ordered that he be incarcerated as a coercive sanction until he did so. While Hansbrough successfully appealed the coercive sanction, it is abundantly clear that Hansbrough was informed on that occasion that his continued recalcitrance would be viewed as contempt of court. 21 After the district court reversed the coercive sanction of incarceration, the bankruptcy court held three additional hearings to address Hansbrough's failure to comply with the court's order. At each, Hansbrough was unambiguously ordered to comply, under pain of contempt of court. He failed at each hearing to comply with the court's order, and at the final hearing was sanctioned an amount approximating the fees and costs incurred by the Trustee as a result. 22 The record is clear that Hansbrough had ample notice of the consequences of his acts and failures, and his conduct continued unabated. Hansbrough has not met his high burden of demonstrating that, in the face of his conduct, the bankruptcy court abused its discretion in not holding yet another evidentiary hearing prior to sanctioning him. The district court's order affirming the imposition of the sanction is therefore affirmed. 23