Court Opinion

ID: 4203957
Source: CourtListenerOpinion
Date Created: 2017-09-15 20:01:07.788618+00
Date Added: 2024-06-11T09:51:08.537779
License: Public Domain

FILED
                           NOT FOR PUBLICATION
                                                                            SEP 15 2017
                    UNITED STATES COURT OF APPEALS                       MOLLY C. DWYER, CLERK
                                                                          U.S. COURT OF APPEALS

                            FOR THE NINTH CIRCUIT

In re: CINEVISION INTERNATIONAL,                 No.   16-60015
INC.,
                                                 BAP No. CC: 15-1227
                   Debtor,
__________________________________               D.C. No. 2:11-bk-40813-TD

FRANK MAYOR; CINDY GUNADI,
                                                 MEMORANDUM *
                        Appellants,
v.

EDWARD M. WOLKOWITZ,

                       Appellee.

                           Appeal from the Ninth Circuit
                             Bankruptcy Appellate Panel
              Faris, Corbit, and Taylor, Bankruptcy Judges, Presiding

                      Argued and Submitted August 31, 2017
                               Pasadena, California

      *
             This disposition is not appropriate for publication and is not precedent
except as provided by Ninth Circuit Rule 36-3.
Before: FISHER and BYBEE, Circuit Judges, and BARTLE,** District Judge.

      Frank Mayor and Cindy Gunadi appeal from the February 17, 2016 order of

the Bankruptcy Appellate Panel. That order affirmed the July 8, 2015 order of the

Bankruptcy Court holding them in civil contempt for failure to turn over certain

property in their possession which belonged to the bankruptcy estate of the debtor

Cinevision International, Inc. The order also directed the contemnors to pay

sanctions in the amount of the fees and costs incurred by the Trustee’s counsel in

the adversary action. We have jurisdiction pursuant to 28 U.S.C. § 158(d)(1). We

review questions of law de novo, Christensen v. Tucson Estates, Inc. (In re Tucson

Estates, Inc.), 912 F.2d 1162, 1166 (9th Cir. 1990), and questions of fact for clear

error, Federal Trade Commission v. Affordable Media, LLC, 179 F.3d 1228, 1239

(9th Cir. 1999).

      After Cinevision filed for bankruptcy, the Trustee wrote to Mayor and

Gunadi to turn over to the bankruptcy estate certain property identified in his letter.

When Mayor and Gunadi failed to do so, the Trustee instituted an adversary

proceeding in the Bankruptcy Court. On March 12, 2015, Bankruptcy Judge

Vincent Zurzolo granted summary judgment in favor of the Trustee and ordered

      **
             The Honorable Harvey Bartle III, United States Judge for the Eastern
District of Pennsylvania, sitting by designation.
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the property to be turned over. Shortly thereafter, the Trustee initiated a civil

contempt proceeding in the Bankruptcy Court before a different Bankruptcy Judge

against Mayor and Gunadi pursuant to 11 U.S.C. § 105(a) for violating the

self-effectuating automatic stay in not having turned over the property prior to the

decision of Judge Zurzolo. The Bankruptcy Court held Mayor and Gunadi in civil

contempt and as noted above directed them to pay the Trustee’s counsel fees and

costs incurred in pursuing the adversary proceeding.

      Mayor and Gunadi argue that the Bankruptcy Court erred in failing to apply

the proper standard of proof and in failing to make certain findings as required

under Knupfer v. Lindblade (In re Dyer), 322 F.3d 1178 (9th Cir. 2003). Mayor

and Gunadi are correct. In Knupfer, this Court reiterated the well-established law

that the clear and convincing standard of proof must be met in order to hold a

person in civil contempt. Id. at 1190–91. The Bankruptcy Court did not invoke

this standard but instead relied generally on the findings of fact and conclusions of

law of Judge Zurzolo in the adversary proceeding where the lower preponderance

of the evidence standard of proof applied. See Anderson v. Liberty Lobby, Inc.,

477 U.S. 242 (1986). In order for Mayor and Gunadi to be held in civil contempt,

Knupfer requires findings (1) that the contemnors “knew of the automatic stay” and

(2) that their “actions which violated the stay were intentional.” Knupfer, 322 F.3d

                                           3
at 1191. The Bankruptcy Court did not make these specific findings and thus

committed clear error.

      On remand, the Bankruptcy Court must apply the heightened clear and

convincing standard of proof. The Bankruptcy Court must also make the specific

findings required by Knupfer. It should identify the references in the record which

support its findings and any reasonable inferences drawn therefrom.

      The Court has considered appellants’ remaining arguments, including a

challenge to whether Gunadi was in possession of the property in question, and

concludes that those arguments are without merit.

      REVERSED and REMANDED for proceedings consistent with this

Memorandum.

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