Court Opinion

ID: 11772
Source: CourtListenerOpinion
Date Created: 2010-04-25 06:07:41+00
Date Added: 2024-06-11T13:28:17.847230
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UNITED STATES COURT OF APPEALS
                        FOR THE FIFTH CIRCUIT

                        _____________________

                             No. 96-30146
                        _____________________

               In The Matter Of: JAMES A. NORRIS, JR.,

                                                               Debtor.

                        JAMES A. NORRIS, JR.,

                                                          Appellant,

                                versus

         DON H. JOHNSON; ALLAN L. PLACKE; BILLY R. VINING,

                                                          Appellees.

_________________________________________________________________

           Appeal from the United States District Court
               for the Western District of Louisiana
        (95-CV-1774, 95-CV-1791, 95-CV-1792, 95-CV-1857)
_________________________________________________________________
                           April 11, 1997
Before HIGGINBOTHAM, DAVIS, and BARKSDALE, Circuit Judges.

PER CURIAM:1

     This is a most unusual case, to say the least, arising in part

out of the claimed destruction by James A. Norris, Jr., debtor in

an   involuntary   bankruptcy   proceeding   under   Chapter   7,   of

approximately $500,000 in currency.      He appeals the order for

relief; an order requiring him to turnover the currency he claims

     1
          Pursuant to Local Rule 47.5, the court has determined
that this opinion should not be published and is not precedent
except under the limited circumstances set forth in Local Rule
47.5.4.
he   destroyed;   an   order   denying   his     motion   for    stay   and    for

appointment of expert witnesses; and an order holding him in civil

contempt for failing to comply with the turnover order.                         It

appears,   however,     that    Norris     was    released      recently      from

incarceration.    We AFFIRM.

                                    I.

      Norris formerly served as District Attorney for Ouachita and

Morehouse Parishes in Louisiana and was a member of the law firm of

Norris, Johnson & Placke.      In re Norris, 183 B.R. 437, 440 (Bankr.

W.D. La. 1995). In mid-June 1989, believing that his partners were

using partnership funds for personal purposes, and without prior

notification to them, Norris withdrew from the firm and, using

approximately $526,000 of the partnership’s funds on deposit in

various accounts at banks in Ouachita Parish, paid off loans to the

partnership, extinguishing all of its long-term debt, and paid to

himself one-third of the remaining funds.             He also paid himself

$10,000 for law books that he had brought into the partnership.

Shortly thereafter, Johnson, Placke, and the law firm filed suit

against Norris in state court, seeking an accounting, restoration

of funds paid on partnership debts, and damages.                Id. at 440.

      In January 1994, Norris and his wife borrowed approximately

$150,000 from a commercial lender and mortgaged their home, which

previously had been unencumbered.          Id. at 441.       And, during that

January and February, Norris mortgaged other property to secure

                                   - 2 -
loans of $300,000 from his mother and $60,000 from his cousin.                 Id.

According to Norris, the purpose of the loans was for renovation of

his home and to have funds available to post a cash bond if the

state court action was decided adversely.               Id. at 442.       Norris

deposited the loan proceeds into a bank account but later withdrew

them, converted them into currency ($100 bills), and placed them in

a safe deposit box.      Id.    Norris maintained that he spent $5,000 to

$10,000 of the money on living expenses.             Id.

       Following a trial, the state court entered judgment against

Norris in September 1994 for approximately $526,000, plus interest,

less a credit of approximately $144,000, representing Norris’

interest in the firm.          In addition, the state court awarded the

firm approximately $58,000, awarded $30,000 each to Johnson and

Placke, and assessed Norris for costs and expert witness fees.

Norris filed a devolutive appeal, but did not suspensively appeal

the    judgment;     accordingly,     it    became   final   for    purposes   of

execution.     Id. at 440.

       After the state court judgment was rendered, Norris prepaid 12

or    13   monthly   payments    on   his     home   mortgage   (approximately

$18,000), with the next payment not due until approximately a year

later -- October 1995.         Id. at 444.     Also in October 1994, Norris

borrowed another $40,000 from his mother and another $40,000 from

his cousin, and paid $60,000 to the Internal Revenue Service, as

well as taxes owed to the State of Louisiana.                      Id.   He also

                                      - 3 -
purchased     an   automobile    for   his     wife   to   replace   her   damaged

vehicle, and had extensive renovations performed on his residence.

Id.

       At a state court judgment debtor examination in December 1994,

when asked about the currency in the safe deposit box, Norris

testified that he had “spent” it.              And, when asked what the cash

was spent on, he testified that he could “[g]o back and look at

records” and provide more detail on “exactly what I’ve done with

what monies”.      Id.

       In January 1995, Johnson, Placke and the law firm initiated

involuntary bankruptcy proceedings against Norris. That April, the

trustee filed a motion for turnover of the $490,000 to $500,000 in

currency formerly in the safe deposit box.

       At a deposition that May, Norris testified that he used the

term “spent” at the December 1994 judgment debtor examination to

convey that the money was “gone”, “burned”.                   Id.    According to

Norris, after learning of the state court judgment, he went to the

bank and removed the currency from the safe deposit box, placed it

in    his   briefcase,   and    took   it    home;    later   that   weekend,    he

saturated the currency with gasoline and burned it in a trash

barrel outside his home.         Id. at 442-43.

       Following a trial in May 1995 on the involuntary petition and

the turnover motion, the bankruptcy court entered an order for

relief and granted the motion.          In re Norris, 183 B.R. at 437.          And

                                       - 4 -
that June, the trustee moved for sanctions and to hold Norris in

civil contempt for failing to comply with the turnover order.                 A

week before the scheduled 21 July hearing, Norris sought a stay of

all proceedings until the state court litigation appeals were

exhausted.    In re Norris, 192 B.R. 863, 866 (Bankr. W.D. La. 1995).

And, prior to the taking of evidence at the hearing, Norris filed

another motion, seeking a jury trial; appointment of counsel;

appointment of experts to analyze the barrel in which the currency

allegedly was burned; to dismiss the contempt proceedings as

violative of his grant of immunity, for failure to comply with

F.R.B.P. 9020, and because of a conflict of interest on the part of

the trustee; and a continuance for lack of sufficient time to

prepare.    Id.

     On 21 July, the bankruptcy court conducted a hearing on the

contempt    motion   and     Norris’   motions;    Norris     appeared   without

counsel.     The bankruptcy court entered an order denying Norris’

motion for stay and for appointment of experts.               Id. at 876.    The

portion of the order dealing with the trustee’s contempt motion and

Norris’ motion for a jury trial, for appointment of counsel, and

for dismissal was styled as a report and recommendation to the

district    court.         Id.   Norris       objected   to   the   report   and

recommendation,      and    appealed    the    order   concerning   relief   and

turnover.     The district court affirmed the bankruptcy court’s

                                       - 5 -
relief    and    turnover    orders     and    accepted     its   recommendation

regarding contempt and the denial of other relief sought by Norris.

       Following oral argument in this court, and by order dated 19

March 1997, the district court ordered that Norris be released

immediately, based upon the United States deciding to pursue

criminal proceedings against him.               The order provided that the

release was so that Norris “can assist his counsel in the criminal

charges against him.”

                                        II.

       Norris challenges the entry of the order for relief on grounds

that the debts owed to the petitioning creditors were subject to a

bona fide dispute, and that the petitioning creditors failed to

prove that he was not generally paying his debts as they became

due.    He contests the turnover order, claiming that the bankruptcy

court    finding   that     he   did   not    burn   the   currency   is   clearly

erroneous.      Finally, he challenges the contempt order on numerous

grounds, including denial of counsel, of expert witness fees, and

of a jury trial; the bankruptcy court’s lack of contempt power;

failure to comply with the notice requirements of F.R.B.P. 9020;

and an alleged conflict of interest on the part of the trustee.

                                         A.

       Involuntary bankruptcy proceedings are governed by 11 U.S.C.

§ 303.    If the debtor has 12 or more creditors, the petition must

be filed by

                                       - 6 -
            three or more entities, each of which is
            either a holder of a claim against such person
            that is not contingent as to liability or the
            subject of a bona fide dispute, or an
            indenture trustee representing such a holder,
            if such claims aggregate at least $10,000 more
            than the value of any lien on property of the
            debtor securing such claims held by the
            holders of such claims.

11 U.S.C. § 303(b)(1).    If the debtor has fewer than 12 creditors,

excluding    employees,   insiders,    and   transferees   of   voidable

transfers, the petition may be brought by “one or more of such

holders that hold in the aggregate at least $10,000 of such

claims”.    11 U.S.C. § 303(b)(2).

     If the petition for involuntary relief is contested, the

Bankruptcy Code provides, in pertinent part, that the bankruptcy

court

            shall order relief against the debtor ... only
            if

                 (1) the debtor is generally not paying
            such debtor’s debts as such debts become due
            unless such debts are the subject of a bona
            fide dispute ....

11 U.S.C. § 303(h)(1).

     We review the bankruptcy court’s findings of fact under the

clearly erroneous standard, and its conclusions of law de novo.

F.R.B.P. 8013; Subway Equip. Leasing Corp. v. Sims (Matter of

Sims), 994 F.2d 210, 217 (5th Cir. 1993), cert. denied, 510 U.S.
1049 (1994).

                                  1.

                                - 7 -
     The bankruptcy court required the petitioning creditors to

satisfy the requirements of § 303 (debtor generally not paying

debts as they become due and debts not subject to bona fide

dispute) by a preponderance of the evidence.          In re Norris, 183
B.R. at 449.   Citing Grogan v. Garner, 498 U.S. 279 (1991), Norris

contends that the clear and convincing standard should have been

used.

     In   Grogan,     the    Court   stated   that,     “[b]ecause   the

preponderance-of-the-evidence standard results in a roughly equal

allocation of the risk of error between litigants, we presume that

this standard is applicable in civil actions between private

litigants unless particularly important individual interests or

rights are at stake.”       Id. at 286 (internal quotation marks and

citations omitted).    The Court concluded that the preponderance of

the evidence standard applied to proof of 11 U.S.C. § 523's

discharge exceptions (including the fraud exception), stating that

it was unpersuaded that a debtor had an interest in discharge

sufficient to require a heightened standard of proof or that the

clear and convincing standard was necessary to effectuate the

“fresh start” policy of the Bankruptcy Code.      Id.

     Although it is true that involuntary bankruptcy has been

described as an “extreme” remedy, e.g., In re Cates, 62 B.R. 179,

180 (Bankr. S.D. Tex. 1986), we do not consider the severity of the

remedy to warrant the imposition of a clear and convincing standard

                                 - 8 -
of proof for satisfaction of the requirements of § 303.            A debtor

may recover costs, attorney’s fees, and damages against petitioning

creditors if an involuntary case is dismissed and the petition was

filed in bad faith, see 11 U.S.C. § 303(i).          Accordingly, there is

no   need to   create   an   exception    to   the   general   preponderance

standard.

                                    2.

      Norris stipulated that each of the petitioning creditors held

a claim of at least $5,000 more than the value of any lien on

property of the debtor securing such claim, thus satisfying §

303(b)(1)’s requirement that the aggregate unsecured claims of the

petitioning creditors exceed $10,000.          In re Norris, 183 B.R. at

450. And, he does not challenge the bankruptcy court’s ruling that

the creditors’ claims were not contingent as to liability, as

required by § 303(b)(1).      Id. at 451.      He contends, however, that

the debts of the petitioning creditors were subject to bona fide

disputes, which disqualified them as petitioning creditors pursuant

to § 303(b)(1), and precluded their debts from being considered in

determining whether he was generally not paying his debts as they

became due, pursuant to § 303(h)(1).           Norris maintains also that

the bankruptcy court erred by excluding expert testimony regarding

the existence of a bona fide dispute and by holding that a debt

based on an executory judgment is not subject to a bona fide

dispute.

                                  - 9 -
                                a.

     Norris contends that, even though his debts to the petitioning

creditors were based on a judgment entered by the state trial

court, those debts were subject to bona fide disputes.     In Matter

of Sims, our court adopted an objective standard for making this

determination.   “Under that objective standard, the bankruptcy

court must determine whether there is an objective basis for either

a factual or a legal dispute as to the validity of the debt.” 994
F.2d at 220 (quoting In re Rimell, 946 F.2d 1363, 1365 (8th Cir.

1991), cert. denied, 504 U.S. 941 (1992)).    We also adopted the

Eighth Circuit’s methodology for applying the standard:

          The petitioning creditor must establish a
          prima facie case that no bona fide dispute
          exists. Once this is done, the burden shifts
          to   the    debtor    to   present    evidence
          demonstrating that a bona fide dispute does
          exist.   Because the standard is objective,
          neither the debtor’s subjective intent nor his
          subjective belief is sufficient to meet this
          burden. The court’s objective is to ascertain
          whether a dispute that is bona fide exists;
          the court is not to actually resolve the
          dispute.     This does not mean that the
          bankruptcy court is totally prohibited from
          addressing the legal merits of the alleged
          dispute; indeed, the bankruptcy court may be
          required to conduct a limited analysis of the
          legal issues in order to ascertain whether an
          objective legal basis for the dispute exists.
          Finally, because the determination as to
          whether a dispute is bona fide will often
          depend ... upon an assessment of witnesses’
          credibilities       and    other      factual
          considerations,    the   bankruptcy    court’s
          determination in this regard is a factual
          finding that may be overturned on appeal only
          if it is clearly erroneous.

                              - 10 -
Id. (brackets omitted; quoting Rimell, 946 F.2d at 1365).

     The bankruptcy court reviewed the cases dealing with claims

based on final judgments, and decided to join the overwhelming

majority of other courts that have found that such claims are not

subject to a bona fide dispute.         In re Norris, 183 B.R. at 453-54.

See, e.g., In re Everett, 178 B.R. 132, 140 (Bankr. N.D. Ohio 1994)

(unappealed, unstayed final judgments not subject to bona fide

dispute); In re Smith, 123 B.R. 423, 425 (Bankr. M.D. Fla. 1990)

(claim based on judgment not subject of bona fide dispute), aff’d,

129 B.R. 262 (M.D. Fla. 1991); In re Raymark Industries, Inc., 99
B.R. 298, 300 (Bankr. E.D. Pa. 1989) (unstayed judgment not subject

to bona fide dispute); In re Drexler, 56 B.R. 960, 967 (Bankr.

S.D.N.Y. 1986) (claim based upon unstayed judgment as to which an

appeal has been taken by debtor is not the subject of a bona fide

dispute).

     Norris relies on In re Prisuta, 121 B.R. 474 (Bankr. W.D. Pa.

1990).     Although the Prisuta court recognized that In re Drexler

was the leading case on the issue, it distinguished Drexler and

created an exception because, “[t]o hold otherwise would, in

certain     instances,     enable    creditors       to   use   the   threat     of

involuntary bankruptcy as a weapon to coerce a debtor to satisfy a

judgment even when substantial questions may remain concerning the

liability of the debtor.”            Prisuta, 121 B.R at 476.           But, in

Prisuta,    the   claims   were     based   on   a   default    judgment   and   a

                                     - 11 -
confession of judgment; and, unlike here, no evidentiary hearings

were held prior to entry of the judgments.            Id. at 475, 476.

     In sum, we hold that the unstayed final judgment against

Norris was not subject to a bona fide dispute for purposes of 11

U.S.C. § 303(b)(1) and 303(h)(1).           To hold otherwise would require

the bankruptcy court to review the state court judgment in order to

predict Norris’       chance   of   success   on   appeal   (which   would    be

particularly troubling in that a state court judgment is at issue),

and would undermine the objective standard adopted in Sims.                  (We

note that, although the existence of a bona fide dispute must be

determined as of the date the petition was filed, cf. Matter of

Sims, 994 F.2d at 222 (determination of whether debtor generally

not paying debts as they become due must be made as of date of

filing of petition), the state court judgment against Norris was

affirmed by the Louisiana Court of Appeal, and the Louisiana

Supreme Court denied Norris’ writ application. Johnson & Placke v.

Norris, 666 So. 2d 1098 (La. 1996).)

                                       b.

     Norris contends that the bankruptcy court erred by refusing to

admit into evidence the depositions of two expert witnesses who

opined   that   the    state   court   judgment     would   be   reversed    or

substantially modified on appeal because of errors of law. Because

the bankruptcy court was not required to predict Norris’ chance of

success on appeal, expert testimony on that subject was irrelevant.

                                    - 12 -
                                           3.

       Norris maintains that the bankruptcy court erred by holding

that he was not generally paying his debts as they became due.                        In

support,       he   asserted    that    the     only    unpaid    debts   as   of    the

involuntary         petition    filing     were    those     of    the    petitioning

creditors, which he claims erroneously were subject to a bona fide

dispute.        Restated,      the    petitioning       creditors’   debts     can   be

considered under § 303(h)(1) in making the “generally not paying”

determination.

       The Bankruptcy Code does not define the term “generally not

paying”, thus leaving the scope and meaning of that term to the

courts.    See 2 COLLIER       ON   BANKRUPTCY ¶ 303.14[1][b], at 303-78 (15th

ed. rev. 1996). The determination of whether a debtor is generally

paying his debts must be made as of the date the petition is filed.

Matter of Sims, 994 F.2d at 222.                       Accordingly, post-petition

payments of debts that were due as of the filing date may not be

considered; nor do we consider debts which have not then become

due.

       In In re All Media Properties, Inc., 5 B.R. 126 (Bankr. S.D.

Tex. 1980), aff’d, 646 F.2d 193 (5th Cir. 1981), one of the first

cases     to    interpret       the    Code’s     provisions       for    involuntary

proceedings, the bankruptcy court stated that the court should

consider “both the amount of the debt not being paid and the number

of creditors not being paid” in determining whether a debtor’s

                                         - 13 -
failure to pay is “general”. 5 B.R. at 142.          The court stated

further that

            generally not paying debts includes regularly
            missing a significant number of payments to
            creditors or regularly missing payments which
            are significant in amount in relation to the
            size of the debtor’s operation.      Where the
            debtor has few creditors the number which will
            be significant will be fewer than where the
            debtor has a large number of creditors. Also,
            the amount of the debts not being paid is
            important. If the amounts of missed payments
            are not substantial in comparison to the
            magnitude    of   the   debtor’s    operation,
            involuntary relief would be improper.
5 B.R. at 143.

     COLLIER    ON   BANKRUPTCY      describes       the   “generally    not   paying”

standard   as    calling       for    “a     broad    definition      rather   than   a

mechanical test.”         2 COLLIER     ON   BANKRUPTCY, ¶ 303.14[1], at 303-78

(15th ed. rev. 1996).             Numerous factors have been considered by

courts in determining whether a debtor is paying his debts as they

become   due,    including:        whether     the     debtor   is    conducting   his

financial affairs in a manner inconsistent with good faith and

outside the ordinary course of business; the debtor’s overall

payment activity and payment practices; the amount of the debtor’s

debts compared to the amount of the debtor’s yearly income; and the

fact that insiders deferred payment on account of loans payable to

them.    See 2 COLLIER    ON   BANKRUPTCY ¶ 303.14[1][b], at 303-80, 303-81

(15th ed. rev. 1996), and cases cited therein.

                                           - 14 -
     At the trial on the involuntary petition, Norris testified

that his only significant creditors as of the filing date were (1)

the petitioning creditors; (2) his mother; (3) his cousin; and (4)

the mortgage company. Pursuant to a joint pretrial stipulation,

Norris had ongoing recurring bills related to his law practice and

household obligations.

     Norris testified that, on the filing date, he had not repaid

any principal to his cousin, and that he had paid his mother

$6,600, but was unsure whether she applied it to principal or

interest.    He had previously stipulated, however, that he had paid

only interest on the claims of his mother and his cousin, and had

paid nothing on those debts during the six months preceding the

date of the stipulation.    Norris testified that, as of the earlier

filing date, he owed his mother $340,000; his cousin, $100,000; and

the mortgage company, $125,000 or $130,000.       In October 1994,

Norris prepaid his note to the mortgage company for 12 or 13

months.     He also paid some State taxes and paid $60,000 to the

Internal Revenue Service.    He paid his office rent six months in

advance and overpaid utility and doctor bills. He had paid nothing

on the $840,000 aggregate debt to the petitioning creditors.

     Norris testified that, on the date the petition was filed, he

was current on all of his debts, including those involved in

running his household and law office.     He testified further that

the only debts he had not paid were those owed to the petitioning

creditors.

                                - 15 -
     The bankruptcy court found that Norris was not paying his

debts as they became due at the time the petition was filed.     It

stated:

          Norris was in total default on his obligations
          to the three petitioning creditors.     He has
          also failed to pay his mother, his cousin, the
          Clerk of Court, numerous other recurrent
          creditors, and most likely the IRS.        His
          stealthy handling of his financial affairs is
          nothing more than a facade to create the
          artificial “illusion” of a debtor paying his
          debts. Norris’ own actions have converted his
          once debt-free portfolio into a mountain of
          debt, thus leaving these creditors no other
          alternative but to turn to ... this Court.

In re Norris, 183 B.R. at 459.

     Norris contends that many of the bankruptcy court’s findings

are clearly erroneous.   He asserts that the debts to his mother and

cousin were based on demand notes, and that those debts were not

due because no payment demands had been made; that he owed nothing

to the clerk of the state court, because the judgment for court

costs was in favor of Johnson & Placke; and that there was no

evidence of any debt to the IRS and that, because he paid the IRS

over $60,000 in October 1994, it probably owed him money.        He

challenges also the bankruptcy court’s findings regarding four

small debts that he claims were not due at the time of the filing

of the petition.

     Even assuming arguendo that Norris is correct regarding the

debts mentioned in the preceding paragraph, we nevertheless agree

with the bankruptcy court that, on the date the petition was filed,

                               - 16 -
Norris was not generally paying his debts as they became due.   “The

term `generally’ was not defined [in the Bankruptcy Code] in order

to avoid the result suggested by [a] mechanical test ... and to

give the bankruptcy courts enough leeway to be able to deal with

the variety of situations that will arise.”     All Media, 5 B.R. at

143.

       Pursuant to our assumption that the only debts Norris was not

paying as they became due were those owed to the petitioning

creditors, the bankruptcy court was entitled to consider the size

of those debts ($840,000 in the aggregate) as compared to the size

of the other significant debts on which we have assumed Norris was

current (approximately $570,000, $440,000 of which was owed to

relatives).    Id.   The court also was entitled to consider Norris’

overall handling of his financial affairs, including the facts that

(1) other than the debts owed the petitioning creditors, the

largest debts owed by Norris were to his mother and cousin; (2)

Norris incurred the obligations to his mother, cousin, and the

mortgage company after the entry of the petitioning creditors’

judgment against him and, in doing so, encumbered previously

unencumbered property; and (3) Norris was current on his mortgage

payments and other recurring obligations only because he had

prepaid or overpaid them.     See In re Norris, 183 B.R. at 457-58.2

       2
          Norris asserts erroneously that the bankruptcy court
applied the so-called “special circumstances exceptions” to the
“almost per se rule” that a single creditor involved in a two-party

                                - 17 -
                                          B.

      The   Bankruptcy        Code    provides    that,      subject    to   certain

exceptions not applicable here, “an entity ... in possession,

custody, or control, during the case, of property that the trustee

may use, sell, or lease ... shall deliver to the trustee, and

account for, such property or the value of such property, unless

such property      is    of     inconsequential      value    or   benefit   to   the

estate.”    11 U.S.C. § 542.          The bankruptcy court found that Norris

had not been truthful about having burned approximately $500,000,

that he was still in possession and control of the currency, and

that it was property of the estate which could benefit Norris’

creditors.      In re Norris, 183 B.R. at 463.            Therefore, it ordered

Norris to turn over the currency to the trustee immediately.                      Id.

Norris contends that the bankruptcy court erred by failing to apply

the appropriate standard of proof,               and that its finding that he

was still in possession of the currency is clearly erroneous.

                                          1.

      Norris asserts that the bankruptcy court should have required

the   trustee    to     prove    by    clear   and   convincing        evidence   the

requirements for entry of a turnover order. The bankruptcy court’s

opinion does not specify the standard utilized.                     Norris equates

dispute with the debtor is ineligible for involuntary relief.
Instead, the bankruptcy court stated that Norris’ reliance on the
“single creditor” rule was misplaced, because it had already
determined that “Norris has unquestionably failed to pay more than
one debt.” In re Norris, 183 B.R. at 460.

                                        - 18 -
this with the preponderance standard being applied and maintains

that it placed the burden of proof on him, rather than on the

trustee.

      It is well-settled that, in turnover proceedings, the trustee

must prove by clear and convincing evidence both that the property

at issue is property of the bankruptcy estate and that it is in the

possession of the party proceeded against.        E.g., Maggio v. Zeitz

(In re Luma Camera Service, Inc.), 333 U.S. 56, 64(1948); Republic

Nat’l Bank of Houston v. Sheinfeld (Matter of Goodson Steel Corp.),

488 F.2d 776, 778 (5th Cir. 1974); Amdura Nat’l Distribution Co. v.

Amdura Corp. (In re Amdura Corp.), 167 B.R. 640, 643 (D. Colo.

1994), aff’d, 75 F.3d 1447 (10th Cir. 1996).             The bankruptcy

court’s omission of a reference to this well-known standard in its

very thorough opinion does not support Norris’ speculation that the

court applied an incorrect standard.

                                   2.

      We also reject Norris’ contention that the bankruptcy court

clearly erred by finding that he was in possession of the allegedly

burned currency.       To repeat the well-known standard, a factual

finding is clearly erroneous “when although there is evidence to

support it, the reviewing court on the entire evidence is left with

the   definite   and   firm   conviction   that   a   mistake   has   been

committed.”   Anderson v. City of Bessemer City, N.C., 470 U.S. 564,

573 (1985) (citation omitted). “If the district court's account of

                                 - 19 -
the evidence is plausible in light of the record viewed in its

entirety, the court of appeals may not reverse it even though

convinced that had it been sitting as the trier of fact, it would

have weighed   the    evidence   differently.       Where      there    are   two

permissible views of the evidence, the factfinder's choice between

them cannot be clearly erroneous.”          Id. at 573-74.

     Norris admitted that he possessed $490,000 to $500,000 in $100

bills, but claimed that he had destroyed all of it by burning it in

a trash barrel outside his home.          The bankruptcy court, which had

the opportunity to judge Norris’ credibility after observing his

testimony   about    the   alleged   incineration,      gave    an     extremely

detailed and comprehensive explanation for why it found Norris’

bizarre tale unbelievable, and “unquestionably conclude[d] that

Norris fabricated     this   all-encompassing     and    indeed      phenomenal

story.”   See In re Norris, 183 B.R. at 460-62.         We cannot say that

this factual finding is clearly erroneous.

                                     C.

     As noted, it appears that Norris was released recently.                  Our

only record of this is the district court’s 19 March 1997 order.

Accordingly, although it may well be that the contempt issues are

moot, we will address them.

     Norris challenges the contempt order and the order denying his

motions for other relief (stay, appointed counsel, appointment of

experts, jury trial, etc.) on numerous grounds.           He contends that

                                 - 20 -
the bankruptcy court erred by refusing to appoint counsel, because

his indigence was caused by the bankruptcy court’s refusal to rule

on whether he was entitled to his claimed exemptions, and he was

denied effective pro se representation because he was not competent

in bankruptcy law and, while incarcerated, was denied access to

materials necessary to prepare an appeal brief; that his due

process right to present the defense of present inability to comply

with the turnover order was violated by the bankruptcy court’s

refusal to appoint and pay experts to analyze the garbage barrel in

which he allegedly burned the currency; that the bankruptcy court

erred by denying him a jury trial; that the bankruptcy court has no

contempt power; that the contempt should be treated as criminal

rather than civil because deprivation of his liberty was at stake;

that the trustee had a conflict of interest and was therefore

disqualified from being the movant in a contempt proceeding; and

that the notice requirements of F.R.B.P. 9020 were violated because

notice of the alleged contempt was given by the trustee.

     “A party seeking civil contempt bears the initial burden of

proving by clear and convincing evidence that the alleged contemnor

has violated an outstanding court order.”              Commodity Futures

Trading Comm’n v. Wellington Precious Metals, Inc., 950 F.2d 1525,

1529 (11th Cir.), cert. denied, 506 U.S. 819 (1992).         “Once a prima

facie   showing   of   a   violation   has   been   made,   the   burden   of

production shifts to the alleged contemnor, who may defend his

                                  - 21 -
failure on the grounds that he was unable to comply.”           Id.    If the

alleged contemnor makes a sufficient showing, the party seeking

contempt has the burden of proving ability to comply.            Id.

                                      1.

     Norris appeared at the contempt hearing without counsel, and

requested that the court appoint him counsel. The bankruptcy court

held that he was not entitled to appointed counsel because, as of

the date of the hearing, he was represented by an experienced

bankruptcy attorney who had not sought to withdraw.           In re Norris,

192 B.R. 875.   Needless to say, the bankruptcy court did not abuse

its discretion.

     The bankruptcy court cited In re Fitzgerald, 167 B.R. 689

(Bankr. N.D. Ga. 1994), for the proposition that an indigent debtor

may have a right to appointed counsel if he may be deprived of his

physical liberty if he loses, but it rejected Norris’ claim of

indigence because Norris’ schedules reflected that he had adequate

exempt assets with which to pay counsel.          In re Norris, 192 B.R. at

875. Norris’ contention that the bankruptcy court caused his

indigence by refusing to rule on his claimed exemptions is without

merit, because he did not seek such a ruling until months after the

contempt hearing.

     Norris’    contention   that    he    was   denied   effective    pro   se

representation is also without merit. His asserted incompetence in

bankruptcy law at the time of the contempt hearing is unavailing

                                    - 22 -
because, as stated, his retained counsel had not withdrawn as of

that date.       And, there is no evidence in the record to support

Norris’ contention that he was denied access to legal materials

while incarcerated.

                                          2.

     The       bankruptcy    court      characterized    Norris’    request     for

appointment of additional expert witnesses for further examination

of the alleged burn barrel as “nothing more than a late motion for

reconsideration” of its finding, in the turnover order, that Norris

had not incinerated the currency.                  We agree.      In a contempt

proceeding, it is inappropriate for a court to reconsider the legal

or factual basis of the order claimed to have been disobeyed.                   See

Maggio v. Zeitz, 333 U.S. at 69 (1948) (“It would be a disservice

to the law if we were to depart from the long-standing rule that a

contempt proceeding does not open to reconsideration the legal or

factual basis of the order alleged to have been disobeyed and thus

become     a    retrial     of   the    original    controversy.”);      CFTC    v.

Wellington, 950 F.2d at 1528 (“The court will not reconsider the

legal    or    factual    basis    of    the   order    alleged    to   have    been

disobeyed.”).       Accordingly, the bankruptcy court did not err by

refusing to appoint expert witnesses, and the district court did

not err by refusing to conduct a de novo review of the factual

basis for the turnover order when it reviewed the contempt order.

                                          3.

                                        - 23 -
     There is no right to a jury trial in civil contempt cases.

See United States v. Rylander, 714 F.2d 996, 998, 1004 (9th Cir.

1983), cert. denied, 467 U.S. 1209 (1984);            Hemmerle v. Bakst (In

re Sun-Island Realty), 177 B.R. 391, 396 (S.D. Fla. 1994); see also

Shillitani    v.    United   States,   384 U.S. 364    (1966)   (citations

omitted)    (“The    conditional   nature    of     the    imprisonment--based

entirely upon the contemnor’s continued defiance--justifies holding

civil contempt proceedings absent the safeguards of indictment and

jury, ... provided that the usual due process requirements are

met.”).

                                       4.

     Norris contends that the bankruptcy court had no power to

issue a civil contempt order. In the alternative, he asserts that,

in light of the serious consequences of long-term imprisonment, the

civil contempt at issue should be treated as criminal contempt.

                                       a.

     The bankruptcy court did not hold that it had such contempt

power.     Instead, as noted, it made a report and recommendation

pursuant to F.R.B.P. 9020(c), and the district court adopted it, in

accordance with F.R.B.P. 9033.

     Rule 9020(c) provides that an order of contempt

            shall be effective 10 days after service of
            the order and shall have the same force and
            effect as an order of contempt entered by the
            district court unless, within the 10 day
            period, the entity named therein serves and
            files objections prepared in the manner

                                   - 24 -
          provided   in  Rule   9033(b).     If timely
          objections are filed, the order shall be
          reviewed as provided in Rule 9033.

F.R.B.P. 9020(c). Rule 9033 provides, inter alia, that in non-core

proceedings heard pursuant to 28 U.S.C. § 157(c)(1), the bankruptcy

judge shall file proposed findings of fact and conclusions of law,

to be served by the clerk on all parties; within 10 days after

being served, a party “may serve and file with the clerk written

objections   which     identify    the   specific     proposed   findings     or

conclusions objected to and state the grounds” therefor; and the

district court “shall make a de novo review upon the record or,

after additional evidence, of any portion of the bankruptcy judge’s

findings of fact or conclusions of law to which specific written

objection has been made”.         F.R.B.P. 9033.

     Although    the   bankruptcy     court   expressed      doubt   about   the

applicability of Rule 9033, based on its conclusion that the

contempt proceeding was a core proceeding because it arose in the

context of a turnover proceeding, which is also a core matter, it

nevertheless decided, in light of the unsettled jurisprudence, to

submit the contempt issues to the district court in the form of a

report and recommendation for review pursuant to Rule 9033.               In re

Norris, 192 B.R. at 876.      The bankruptcy court thus acted much as

a magistrate judge would have on a matter assigned for a report and

recommendation    pursuant   to     28   U.S.C.   §   636.     Although      that

procedure may have been unnecessary, it clearly was authorized by

                                    - 25 -
F.R.B.P. 9020.     (In any event, our court recently held that

bankruptcy courts have power to conduct civil contempt proceedings

and to issue orders in accordance with the outcome of those

proceedings.   Placid Refining Co. v. Terrebonne Fuel & Lube, ___

F.3d ___, 1997 WL 109400 (Fifth Cir. Mar. 27, 1997).)

                                     b.

     We reject Norris’ claim that the contempt order should be

treated as criminal.     Criminal contempt is “intended to vindicate

the authority of the court.”        Griffith v. Oles (Matter of Hipp),

895 F.2d 1503, 1515 (5th Cir. 1990).               On the other hand, the

purpose of civil contempt is either to compensate the party in

whose favor the breached order was issued, or to coerce compliance

with the order.    Id.       The contempt order is intended to coerce

compliance with the turnover order; it provided for incarceration

only if Norris did not purge himself of the contempt by complying

with the turnover order within 10 days of the entry of the contempt

order.

                                     5.

     Norris’ reliance on Hipp, for the proposition that the trustee

had a conflict of interest and, therefore, could not prosecute the

contempt charges, is misplaced.       Hipp involved a criminal contempt

proceeding; our court’s holding that the trustee had a conflict of

interest was based on the distinction between criminal contempt

proceedings,   which   are    a   separate   and   independent   proceeding

                                   - 26 -
between the public and the defendant, and not part of the case in

which   the    violated     order   was    issued,   and   civil   contempt

proceedings, which are between the original parties, and are

instituted and tried as part of the main case.         Matter of Hipp, 895
F.2d at 1509.

                                      6.

     Norris charges that the contempt order is invalid because the

trustee, who gave notice of the contempt charges, is not listed

among those authorized to give such notice in F.R.B.P. 9020(b).

Rule 9020(b) provides that, for contempt not committed in the

presence of the bankruptcy judge, notice of the charges “may be

given on the court’s own initiative or on application of the United

States attorney or by an attorney appointed by the court for that

purpose.”     F.R.B.P. 9020(b).

     Even assuming arguendo that Rule 9020(b) was violated, Norris

was not prejudiced.       He received written notice of the charges and

the time and place of the hearing, and he had a reasonable time to

prepare his defense.

                                      7.

     Finally, Norris claims that the contempt order has subjected

him to cruel, unusual, and excessive punishment.             He maintains

that, because he cannot comply with the turnover order, he has, in

effect, been sentenced to life imprisonment.

                                    - 27 -
      We do not retreat from our holding that the bankruptcy court

did not clearly err by finding that Norris fabricated his testimony

regarding the incineration of the currency.        Nonetheless, had he

not been already released, we would have REMANDED the case to the

district court for consideration of whether Norris’ continued

incarceration served the purpose of the civil contempt order.          See

CFTC v. Wellington, 950 F.2d at 1531 (“[w]hile each passing month

of   incarceration   may   strengthen    [the   contemnor’s]   claim    of

inability, ... many months or perhaps even several years may pass

before it becomes necessary to conclude that incarceration will no

longer serve the purpose of the civil contempt order.”); Simkin v.

United States, 715 F.2d 34, 37 (2d Cir. 1983) (“As long as the

judge is satisfied that the coercive sanction might yet produce its

intended result, the confinement may continue. But if the judge is

persuaded ... that the contempt power has ceased to have a coercive

effect, the civil contempt remedy should be ended.”); cf. United

States ex rel. Thom v. Jenkins, 760 F.2d 736, 740 (7th Cir. 1985)

(“it can be assumed that at a certain point any man will come to

value his liberty more than [the amount of money the contempt order

requires him to pay] and the pride lost in admitting that he has

lied”).

      Such remand would have been consistent with the contempt

order, which provides that Norris “may otherwise purge himself of

the contempt as determined by further orders of [the bankruptcy

                                - 28 -
court] or of the United States District Court.”   In re Norris, 192
B.R. at 877.

                              III.

     For the foregoing reasons, the judgment is

                                                     AFFIRMED.

                             - 29 -