Court Opinion

ID: 4647375
Source: CourtListenerOpinion
Date Created: 2020-12-29 16:03:32.169841+00
Date Added: 2024-06-11T08:01:05.420637
License: Public Domain

MEMORANDUM DECISION
Pursuant to Ind. Appellate Rule 65(D),
this Memorandum Decision shall not be                                         FILED
regarded as precedent or cited before any                                Dec 29 2020, 9:10 am
court except for the purpose of establishing                                  CLERK
the defense of res judicata, collateral                                   Indiana Supreme Court
                                                                             Court of Appeals
                                                                               and Tax Court
estoppel, or the law of the case.

ATTORNEY FOR APPELLANT                                  ATTORNEYS FOR APPELLEE
Bruce N. Munson                                         Curtis T. Hill, Jr.
Law Office of Bruce N. Munson, P.C.                     Attorney General of Indiana
Muncie, Indiana
                                                        Natalie F. Weiss
                                                        Deputy Attorney General
                                                        Indianapolis, Indiana

                                          IN THE
    COURT OF APPEALS OF INDIANA

Wayne Handshoe,                                         December 29, 2020
Appellant-Respondent,                                   Court of Appeals Case No.
                                                        20A-PL-200
        v.                                              Appeal from the Delaware Circuit
                                                        Court
Commissioner of the Indiana                             The Honorable Linda Ralu Wolf,
Department of Environmental                             Judge
Management,                                             Trial Court Cause No.
Appellee-Petitioner,                                    18C03-1503-PL-6

Robb, Judge.

Court of Appeals of Indiana | Memorandum Decision 20A-PL-200 | December 29, 2020                  Page 1 of 10
                                Case Summary and Issue
[1]   In 2015, the Indiana Department of Environmental Management (“IDEM”)

      brought an action against Wayne Handshoe to compel Handshoe to clean up

      and remediate a site where Handshoe operates an auto salvage business. In

      2016, the parties entered into an agreed judgment which stipulated, in part, that

      Handshoe pay a $10,250 civil penalty and complete and submit a site

      assessment plan (“SAP”) to IDEM within thirty days of the agreed judgment.

      Because Handshoe had yet to pay any of the civil penalty or submit the SAP by

      mid-2019, he was found in contempt on November 8, 2019, and ordered to be

      incarcerated for seven days unless he paid the entire civil penalty of $10,250 by

      December 31, 2019.

[2]   Handshoe now appeals, raising two issues which we restate as: (1) whether the

      trial court erred by finding him in contempt for failure to pay the civil penalty;

      and (2) whether the trial court’s order that Handshoe be incarcerated unless he

      paid the civil penalty was punitive or coercive. We conclude that the trial court

      erred by finding Handshoe in contempt for failure to pay the civil penalty

      because money judgments are not enforceable by contempt. Also, we conclude

      that although Handshoe was in contempt for failure to submit the SAP, the trial

      court’s sanction was punitive rather than coercive and thus impermissible.

      Accordingly, we reverse the order of contempt in part and remand with

      instructions for the trial court to impose a contempt sanction consistent with

      this opinion.

      Court of Appeals of Indiana | Memorandum Decision 20A-PL-200 | December 29, 2020   Page 2 of 10
                             Facts and Procedural History
[3]   Handshoe owns Westside Auto Parts, an automobile parts salvage business, on

      property in Muncie that he purchased in 2002. Prior to Handshoe owning the

      property it was used as an automobile recycling center. Handshoe currently

      uses the property to sell tires and store cars which will be salvaged. Handshoe

      testified that he currently has cars on the property that can be crushed and tires

      that can be sold and that when the price for the cars was right, 1 he intended to

      have a company come in and crush the vehicles. See Appellate Transcript,

      Volume 2 at 46.

[4]   IDEM conducted inspections on Handshoe’s property in May 2010, August

      2012, and December 2012 and concluded that Handshoe had allowed

      “automotive fluids” and “shredder fluff” to be released into the environment.

      Appellant’s Appendix, Volume 2 at 20. On February 27, 2013, IDEM issued a

      notice of violation which contained an offer to enter into an agreed judgment

      that would detail actions required to correct Handshoe’s violations. In 2014,

      IDEM issued an order to Handshoe requiring him, in part, to take immediate

      steps to capture any potential release of fluid during crushing activities, remove

      all mercury switches from all vehicles, and submit and implement an approved

      1
       Handshoe states that the price of steel is around “$60 a ton []” but has “been up to $250 and $275 higher.”
      Appellate Transcript, Volume 2 at 46. He did not specify what price point he is looking for.

      Court of Appeals of Indiana | Memorandum Decision 20A-PL-200 | December 29, 2020                 Page 3 of 10
      SAP. See id. at 19. IDEM then filed a verified petition for civil enforcement in

      2015, seeking the trial court’s assistance to enforce the 2014 order.

[5]   On March 15, 2016, Handshoe and IDEM entered into an agreed judgment

      which required, in relevant part, that Handshoe file an SAP and pay a civil

      penalty of $10,250 to IDEM. See id. at 23, 27. Handshoe hired an

      environmental consultant for purposes of preparing the SAP; however,

      Handshoe never filed an SAP and never paid any of the civil penalty. On April

      15, 2019, the court granted Handshoe a sixty-day extension of time to file the

      SAP; pursuant to this order Handshoe was required to comply with the agreed

      judgment and submit the SAP by June 14.

[6]   On July 3, 2019, IDEM filed its Renewed Motion for Rule to Show Cause

      asking the court to find Handshoe in contempt because of his failure to submit

      the SAP report and failure to pay the civil penalty. The trial court held a show

      cause hearing on October 9, 2019, during which Handshoe argued that he was

      in debt and could not comply with the trial court’s order. In support of this

      argument, Handshoe claimed that his income only included social security, a

      General Motors pension, and “[a] little” income from his auto parts store. Tr.,

      Vol. 2 at 46. Handshoe further testified that his income had not been high

      enough to pay income taxes for the prior four years and that he has a line of

      credit with Wells Fargo Bank and owes them $25,000. Handshoe did not

      present any documentation of his finances to support his claims. See id. at 48-49.

      Court of Appeals of Indiana | Memorandum Decision 20A-PL-200 | December 29, 2020   Page 4 of 10
[7]   The trial court issued an Order of Contempt of Court on November 8, 2019,

      finding Handshoe in contempt for failing to submit the SAP report and pay the

      civil penalty as ordered in the agreed judgment and the trial court’s April 15,

      2019 order. The trial court determined that Handshoe had “the means to obtain

      sufficient funds to pay the civil penalty.” Appealed Order at 4. The trial court

      ordered Handshoe to be incarcerated for seven days as a sanction for his

      contempt but suspended that order on the condition that Handshoe pay the

      $10,250 civil penalty by December 31, 2019. Handshoe filed a motion to correct

      error on December 9, claiming that the trial court improperly determined he

      had sufficient assets to pay the civil penalty such that he willfully disobeyed the

      court’s orders and that the incarceration order violated Article 1, section 22 of

      the Indiana Constitution. The trial court denied Handshoe’s motion. Handshoe

      now appeals.

                                Discussion and Decision
                                     I. Standard of Review
[8]   A party that is willfully disobedient to a court’s order may be held in contempt

      of court. Witt v. Jay Petroleum, Inc., 964 N.E.2d 198, 202 (Ind. 2012). The

      determination of whether a party is in contempt of court is a matter left to the

      discretion of the trial court. City of Gary v. Major, 822 N.E.2d 165, 171 (Ind.

      2005). Upon review, we will reverse the trial court’s determination only where

      an abuse of discretion has been shown. Meyer v. Wolvos, 707 N.E.2d 1029, 1031

      (Ind. Ct. App. 1999), trans. denied. An abuse of discretion occurs when the trial

      Court of Appeals of Indiana | Memorandum Decision 20A-PL-200 | December 29, 2020   Page 5 of 10
       court’s decision is against the logic and effect of the facts and circumstances

       before it. Id. In reviewing a contempt order, we neither reweigh the evidence

       nor judge the credibility of the witnesses. Srivastava v. Indianapolis Hebrew

       Congregation, Inc., 779 N.E.2d 52, 60 (Ind. Ct. App. 2002), trans. denied.

                                                II. Contempt
[9]    Handshoe argues that the trial court erred by finding him in contempt for failing

       to pay the civil penalty included in the agreed judgment.2 We agree.

[10]   Under Article 1, section 22 of the Indiana Constitution, “[t]he privilege of the

       debtor to enjoy the necessary comforts of life, shall be recognized by

       wholesome laws, exempting a reasonable amount of property from seizure or

       sale, for the payment of any debt or liability hereafter contracted: and there shall

       be no imprisonment for debt, except in case of fraud.” (Emphasis added.) Our

       supreme court has carved out an additional exception in the case of

       enforcement of child support orders but has otherwise reaffirmed the principle

       that money judgments are not enforceable by contempt. See Pettit v. Pettit, 626

       N.E.2d 444, 447 (Ind. 1993): see also Allee v. State, 462 N.E.2d 1074, 1075 (Ind.

       Ct. App. 1984) (“Indiana law is clear in that money judgments are generally

       enforced by execution. Various other collateral and auxiliary remedies are

       2
         Handshoe does not contest the portion of the contempt order finding him in contempt for failure to submit
       the SAP.

       Court of Appeals of Indiana | Memorandum Decision 20A-PL-200 | December 29, 2020                Page 6 of 10
       available for the enforcement of money judgments, but contempt of court is not

       one of these.”) (internal citation omitted).

[11]   Here, Handshoe entered into an agreed judgment with IDEM which provided,

       in part, that he pay a civil penalty of $10,250. Agreed judgments are both

       contractual, in that they agreements between the parties settling the underlying

       dispute, and entries of judgment by the court. Brugh v. Sailors, 130 N.E.3d 149,

       154 (Ind. Ct. App. 2019). We have held that any order that requires the

       payment of a sum of money and states the specific amount due, whether labeled

       as a mandate or a civil money judgment, is a “judgment for money.” Hilliard v.

       Jacobs, 916 N.E.2d 689, 695 (Ind. Ct. App. 2009), trans. denied. Thus, the

       portion of the agreed judgment requiring Handshoe to pay a civil penalty

       constitutes a money judgment for which he cannot be found in contempt.

       Therefore, the trial court erred in holding Handshoe in contempt for failing to

       pay the civil penalty.

                                              III. Sanction
[12]   The trial court erred in finding Handshoe in contempt for failure to pay a

       money judgment; however, the trial court’s contempt finding for failure to

       submit the SAP remains valid. Handshoe does not challenge the trial court’s

       finding of contempt for his failure to submit the SAP, but he argues that the trial

       court’s sanction of incarceration, suspended on the condition that he pay the

       previously imposed civil penalty of $10,250, was improper because it was

       punitive in nature rather than coercive. We agree.

       Court of Appeals of Indiana | Memorandum Decision 20A-PL-200 | December 29, 2020   Page 7 of 10
[13]   In a civil contempt proceeding, the primary objective is not to punish the

       defendant but to coerce action for or to compensate the aggrieved party. Reed v.

       Cassady, 27 N.E.3d 1104, 1114 (Ind. Ct. App. 2015), trans. denied. In such cases,

       imprisonment may be imposed to coerce compliance with a court order. Id.; see

       also Duemling, 243 Ind. at 525, 188 N.E.2d at 276 (“In a civil contempt action

       [any] fine [imposed for contempt] is to be paid to the aggrieved party, and

       imprisonment is for the purpose of coercing compliance with the [original]

       order.”).

[14]   To avoid being purely punitive, a contempt order must offer an opportunity for

       the recalcitrant party to purge himself or herself of the contempt. Reed, 27

       N.E.3d at 1114. Here, Handshoe was found in contempt for failure to submit

       the SAP and failure to pay a civil penalty. Handshoe was ordered to be

       incarcerated for seven days, suspended upon the payment of $10,250 by a

       certain date. Above we concluded that the trial court erred by finding Handshoe

       in contempt for the failure to pay the civil penalty. Therefore, we evaluate the

       trial court’s contempt sanction only with regard to Handshoe’s failure to submit

       the SAP. We conclude that the incarceration has no coercive effect because it is

       suspended on a payment of $10,250 rather than the completion of the SAP. Cf.

       Duemling, 243 Ind. at 525, 188 N.E.2d at 276 (“The order of the court that [a

       party] be committed to jail for contempt until he complies with the original

       order is not punitive but coercive.”).

[15]   Further, the $10,250 purge is an improper punishment for failure to complete

       the SAP. Generally, “[o]nce a party is found to be in contempt, monetary
       Court of Appeals of Indiana | Memorandum Decision 20A-PL-200 | December 29, 2020   Page 8 of 10
       damages are permitted to compensate the other party for injuries resulting from

       the civil contempt.” Hancz, 691 N.E.2d at 1326. Elements which can be

       considered in assessing damages are the inconvenience and frustration suffered

       by the complaining party. Id. Here, $10,250 does not represent damages owed

       by Handshoe to compensate IDEM for the inconvenience and frustration

       caused by his failure to complete the SAP. It is the amount of the civil penalty

       levied by IDEM which Handshoe has yet to pay. The trial court suspending

       incarceration upon the payment of this civil penalty does not compensate

       IDEM for injuries incurred by Handshoe’s failure to complete the SAP; rather it

       punishes Handshoe for having failed to pay the civil penalty. See id. (holding a

       $2,200 fine in lieu of incarceration was not compensation but an alternate

       punishment for past acts). Although the trial court did not err in finding

       Handshoe in contempt for failing to submit the SAP, the sanction for that

       contempt is improperly punitive.3

                                                 Conclusion
[16]   We conclude the trial court abused its discretion by finding Handshoe in

       contempt for failure to pay a money judgment. We also conclude that the trial

       court’s sanction of incarceration, suspended upon the payment of $10,250, for

       failing to submit the SAP was punitive in nature rather than coercive and thus,

       3
         Because we hold that Handshoe cannot be found in contempt for failure to pay the civil penalty, and reverse
       the sanction ordering him to do so, we need not address Handshoe’s argument that he did not have sufficient
       assets to pay.

       Court of Appeals of Indiana | Memorandum Decision 20A-PL-200 | December 29, 2020                Page 9 of 10
       not proper for a civil contempt sanction. Accordingly, we reverse the trial

       court’s sanction and remand with instructions for the trial court to impose a

       sanction that is coercive in nature.

[17]   Reversed and remanded.

       Crone, J., and Brown, J., concur.

       Court of Appeals of Indiana | Memorandum Decision 20A-PL-200 | December 29, 2020   Page 10 of 10