Court Opinion

ID: 38197
Source: CourtListenerOpinion
Date Created: 2010-04-25 20:04:30+00
Date Added: 2024-06-11T09:02:57.743711
License: Public Domain

United States Court of Appeals
                                                               Fifth Circuit
                                                            F I L E D
              IN THE UNITED STATES COURT OF APPEALS
                      FOR THE FIFTH CIRCUIT                   May 12, 2005
                      _____________________
                                                        Charles R. Fulbruge III
                              No. 04-30927                      Clerk
                            Summary Calendar
                         _____________________

                    WAYNE M. ROUSSEAU; ET AL.,

                              Plaintiffs,

                                  v.

                 3 EAGLES AVIATION, INC.; ET AL.,

                              Defendants,

                     3 EAGLES AVIATION, INC.,

                         Defendant - Appellee,

                                  v.

            CLAYTON KRESGE; STANDARD COLLISION, INC.,

                     Garnishees - Appellants.
_________________________________________________________________

           Appeal from the United States District Court
               for the Eastern District of Louisiana
                        USDC No. 2:02-CV-208
_________________________________________________________________

Before JONES, BARKSDALE and PRADO, Circuit Judges.

PRADO, Circuit Judge:*

     Appellants Standard Collision and Clayton Kresge, Standard

Collision’s president and sole officer, appeal the district

court’s order awarding attorney’s fees to appellee 3 Eagles

     *
      Pursuant to 5TH CIRCUIT 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that this opinion should not be published and is not precedent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 5TH CIRCUIT
RULE 47.5.4.

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Aviation, Inc. (“3 Eagles”).   For the following reasons, this

court affirms the district court’s award.

Factual Background

     In October 2002, the district court entered judgment against

Wayne Rousseau and in favor of 3 Eagles in the amount of

$1,341,462.14.   3 Eagles sought to satisfy the judgment, in part,

with money Rousseau had invested in Standard Collision.    In June

2003, Kresge——as Standard Collision’s registered agent for

service of process——was served with a citation, a petition of

garnishment, and garnishment interrogatories.   Kresge responded

to the interrogatories and confirmed that Rousseau had invested

$285,028.87 in Standard Collision.

     In August 2003, 3 Eagles asked the district court to order

Standard Collision to turn over the money that Rousseau had

invested in Standard Collision.   The district court granted the

request and issued an Order to Turn Over and Deposit Seized Funds

(the “Turn Over Order”).   The Turn Over Order directed Standard

Collision to liquidate Rousseau’s investment and to turn over the

sum of $285,028.87 to the court’s registry.

     Kresge was served with the Turn Over Order on September 23,

2003 but did not challenge it.1   When Standard Collision failed to

comply with the order, 3 Eagles asked the district court to hold

     1
      Kresge claims that he notified his attorney when he
received notice of the Turn Over Order, but that his attorney
told him not to worry about it.

                                  2
Kresge in contempt.   Neither Kresge nor Standard Collision

responded.

     In January 2004, the district court held Kresge in contempt.

As a sanction, the district court ordered Kresge to pay 3 Eagles’

attorney’s fees associated with the contempt action.   When

Standard Collision still failed to comply, 3 Eagles asked the

court to enforce the contempt order and to impose additional

sanctions.

     In April 2004——seven months after being served with the Turn

Over Order——Standard Collision and Kresge filed a pleading

opposing 3 Eagles’ motion to enforce and asked the court to

reconsider the Turn Over Order under Rule 60(b).2   They argued

that the Turn Over Order was erroneous because 3 Eagles did not

follow the appropriate garnishment procedures and because the

order gave 3 Eagles more rights against Standard Collision than

Rousseau had.   In response, the district court ordered 3 Eagles

to file a supplemental brief addressing whether a garnishment

proceeding can be used to force a corporate garnishee to

liquidate a judgment debtor’s equity interest in the corporation

and turn over the proceeds to the creditor.   The court also

ordered 3 Eagles to submit a statement of its attorney’s fees

associated with preparing the brief.

     Ultimately, the district court determined that the Turn Over

     2
      FED. R. CIV. P. 60(b).

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Order and contempt order were invalid because 3 Eagles failed to

show that Standard Collision possessed Rousseau’s property.       The

court vacated the Turn Over Order and lifted the sanctions order.

The court, however, also ordered Kresge and Standard Collision to

pay 3 Eagles $9,207.50 in attorney’s fees as compensation for the

cost of filing the supplemental brief.       The court’s order

indicates that the court acted pursuant to the inherent authority

of a district court to enforce its orders.       Kresge and Standard

Collision appeal the award of attorney’s fees.

Standard of Review

     The district court has broad discretion to impose sanctions

in a civil contempt proceeding.3       As a result, this court reviews

the imposition of sanctions for an abuse of discretion.4

Analysis

     Kresge and Standard Collision first argue that the district

court abused its discretion in awarding attorney’s fees because 3

Eagles knew or should have known that no legal basis existed for

     3
      See Am. Airlines, Inc. v. Allied Pilots Ass'n, 228 F.3d
574, 585 (5th Cir. 2000); see also United States v. United Mine
Workers of Am., 330 U.S. 258, 303 (1947) (explaining that because
the interest of an orderly government demands respect of and
compliance with court orders, reviewing courts rely heavily on
the district court for enforcement).
     4
      Am. Airlines, 228 F.3d at 578; Crowe v. Smith, 151 F.3d
217, 226 (5th Cir. 1998); Martin v. Trinity Indus., Inc., 959
F.2d 45, 46 (5th Cir. 1992).

                                   4
the Turn Over Order.    Even if a court issues an erroneous order,

a party must obey the order until it is reversed through an

orderly proceeding.5    The remedy for an erroneous order is appeal,

not noncompliance.6    When a party disobeys a court order, the

court uses a civil contempt proceeding to either compel

compliance or compensate a litigant for damages resulting from

the noncompliance.7    “Compensatory civil contempt reimburses the

injured party for the . . . losses flowing from noncompliance and

expenses reasonably and necessarily incurred in the attempt to

enforce compliance.”8    An award of attorney’s fees is an

appropriate sanction where a party incurs additional expenses as

a result of the other party’s noncompliance.9

     In this case, the district court’s award was appropriate

because 3 Eagles incurred the cost of filing the supplemental

brief as a result of Kresge’s failure to comply with the Turn

     5
      See United Mine Workers of Am., 330 U.S. at 293-94 (holding
that so long as jurisdiction exists, a party must obey a court’s
order even if the court’s action is erroneous).
     6
      See Maness v. Meyers, 419 U.S. 449, 458 (1975) (stating
that a party must comply with a district court’s order and the
remedy for a party opposing the order is appeal, not
noncompliance).
     7
      See Norman Bridge Drug Co. v. Banner, 529 F.2d 822, 827
(5th Cir. 1976) (discussing contempt proceedings).
     8
      Norman Bridge Drug Co., 529 F.2d at 827.
     9
       See Cook v. Ochsner Found. Hosp., 559 F.2d 270, 272 (5th
Cir. 1977 (stating that attorney’s fees are appropriate to
sanction noncompliance with an order).

                                  5
Over Order.10     Had Kresge complied with, or at least challenged,

the Turn Over Order, 3 Eagles would not have pursued the contempt

action or the enforcement action.          The district court, in turn,

would not have ordered 3 Eagles to file the supplemental brief.

Although 3 Eagles may have filed an additional pleading if Kresge

or Standard Collision had responded to the Turn Over Order, the

district court specifically ordered the supplemental brief as

part of the enforcement action.        Because 3 Eagles incurred

additional expenses as a result of Standard Collision’s

noncompliance, the district court did not abuse its discretion

even though the court ultimately determined that no legal basis

existed for the Turn Over Order.

     Kresge and Standard Collision next complain that 3 Eagles is

not entitled to attorney’s fees because it is not the prevailing

party.     The district court, however, did not award attorney’s

fees based on who prevailed.     The district court awarded

attorney’s fees to compensate 3 Eagles for the additional expense

it incurred when Kresge failed to comply with the court’s orders.

The district court’s inherent power to sanction does not depend

on who prevails; instead, the district court may sanction a party

“to enforce compliance with an order of the court or to

compensate for losses or damages sustained by reason of

     10
          See Cook, 559 F.2d at 272.

                                       6
noncompliance.”11     Kresge failed to challenge the Turn Over Order

and the contempt order before finally opposing the enforcement

action.     Had Kresge responded earlier, the district court would

not have ordered 3 Eagles to file the supplemental brief.     The

district court did not abuse its discretion by awarding fees

because the award compensates 3 Eagles for the expenses

reasonably and necessarily incurred in its attempt to enforce

compliance.12

     Finally, Kresge and Standard Collision maintain that they

should not be forced to pay attorney’s fees because 3 Eagles

failed to comply with the district court’s order for the

supplemental brief.     They argue that 3 Eagles did not address

whether a garnishment proceeding may be used to require a

corporate garnishee to liquidate a judgment debtor’s equity

interest in the corporation, but instead advanced a new

explanation about why it should prevail.     Although 3 Eagles

advanced a new argument in the supplemental brief, the award was

still appropriate because it represented losses that flowed from

noncompliance with a court order and expenses that were

     11
          Cook, 559 F.2d at 272.
     12
      See Norman Bridge Drug Co., 529 F.2d at 827 (stating that
the court can compensate a party for the losses flowing from
noncompliance and for expenses incurred in an enforcement
action); see also Dow Chem. Co. v. Chem. Cleaning, Inc., 434 F.2d
1212, 1215 (5th Cir. 1970) (explaining that the district court
can exercise its inherent discretion to correct willful
violations of its orders).

                                    7
reasonably and necessarily incurred in an attempt to enforce

compliance.13     The district court did not award attorney’s fees

based on the contents of the supplemental brief, but rather on

Kresge’s inaction, which ultimately caused 3 Eagles to incur the

costs of the supplemental brief.        The district court required 3

Eagles to file an additional brief as part of an enforcement

proceeding——a dispute that could have been resolved much earlier

had Kresge responded to the court’s orders.       Under these

circumstances, the district court did not abuse its discretion in

awarding attorney’s fees associated with the additional briefing.

Conclusion

     Having determined that the district court did not abuse its

discretion in awarding attorney’s fees to 3 Eagles, the court

AFFIRMS the award.

AFFIRMED.

     13
          See Norman Bridge Drug Co., 529 F.2d at 827.

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