Free Motion for Contempt - District Court of Colorado - Colorado

Case 1:03-cv-02504-REB-CBS

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Filed 09/19/2006

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF COLORADO Civil Action No. 03-CV-02504-REB-CBS PETER HORNICK, an individual, Plaintiff, vs. GARY BOYCE, and JOANNE BOYCE, individuals Defendants/Counterclaimants ______________________________________________________________________ MOTION TO HOLD PLAINTIFF IN CONTEMPT FOR VIOLATION OF FED. R. CIV. P. 62(a) AND REQUEST FOR FORTHWITH HEARING ______________________________________________________________________ Defendants Gary and Joanne Boyce ("Defendants" or "Boyces") hereby move the Court to hold Plaintiff Peter Hornick in contempt for violation of Fed. R. Civ. P. 62(a), and request a forthwith hearing. As grounds, Defendants state as follows: INTRODUCTION Plaintiff has violated Rule 62(a) by initiating proceedings to collect on the judgment in this case prior to the expiration of the 10-day automatic stay on execution of the judgment. The manner in which Plaintiff has done so exhibits not only a willful ignorance of the applicable rules, but a stunning lack of good faith. Plaintiff's conduct thus warrants a finding of civil contempt and, at a minimum, (1) a finding that Plaintiff may not execute on the judgment until such time as the Court rules upon Defendants' motion to stay the judgment, and (2) an award of the attorney fees Defendants have incurred in connection with this motion.

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FACTS On September 6, 2006, the Court entered judgment in this case in favor of Plaintiff Peter Hornick and against the Boyces in the amount of $3,500,000, together with pre- and post-judgment interest. In connection with this case and other related litigation between Plaintiff and Defendants, a mediation was scheduled with Judge Murray Richtel of the Judicial Arbiter Group on September 19, 2006. In the week leading up to the mediation, counsel for the parties had communications concerning both the mediation and Defendants' efforts to obtain Plaintiff's consent to a stay of execution. See Defendants' Motion to Stay Judgment Pending Determination of Post-Trial Motions, ¶ 1 (doc. 117). In their communications, the respective counsel each expressed their hope, apparently in good faith, that progress toward settlement would be made. On the evening of September 18, 2006 at approximately 8:30, Defendant Joanne Boyce was alone at her home in rural Moffatt, Colorado when she heard a loud banging at the door. (Joanne Boyce Declaration, ¶ 2 (attached as Ex. A).) When she answered the door, a man whom she did not recognize handed her Rule 69 interrogatories addressed to both Gary and Joanne Boyce, and writs of garnishment for personal property held by several entities. (Id. ¶ 3.) The documents (which are attached as Exhibit B) were served at the behest of Plaintiff's counsel, who had failed to extend the professional courtesy of contacting Defendants' counsel to inquire as to whether they would accept service of the documents on behalf of their clients.

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Shortly after the aforementioned mediation began, Defendants' counsel also learned that on September 18, 2006, Plaintiff had served garnishment papers on the First Southwest Bank an effort to garnish the proceeds of the Boyces' bank account. A copy of the garnishment papers are attached as Exhibit C. In conversations with Plaintiff's counsel leading up to the mediation, Plaintiff's counsel gave Defendants' counsel no indication that he would initiate proceedings to execute on the judgment prior to the mediation. Defendants' counsel only learned of Plaintiff's improper collection efforts the morning of the mediation. ARGUMENT A. Plaintiff's Collection Efforts Violated the Ten-Day Automatic Stay.

Rule 62(a) provides that "no execution shall issue upon a judgment nor shall proceedings be taken for its enforcement until the expiration of 10 days after its entry." This rule "permits the party against whom judgment has been entered to determine what course of action to follow." 11 Federal Practice & Procedure, § 2902 (2d ed.). Pursuant to Fed. R. Civ. P. 6(a), the ten-day period does not include weekends and holidays. KRW Sales, Inc. v. Kristel Corp., 154 F.R.D. 186, 188 (N.D. Ill. 1994) (holding that the ten-day automatic stay under Rule 62(a) excludes weekends and holidays). Here, the Court entered judgment on September 6, 2006.1 (Docket No. 111.) Under Rule 62(a), Plaintiff was not permitted to execute on the judgment until the eleventh business day after entry, or September 21, 2006. Plaintiff, however, began the
Although the judgment was signed on September 5, 2006, it was not entered on the docket until the following day, on September 6, 2006. Rule 58(b)(2) provides that judgment is entered for purposes of the civil rules "when it is entered in the civil docket under Rule 79(a)." Even assuming, however, that the judgment was entered on September 5, 2006, Plaintiff still attempted to execute on the judgment within ten days in violation of Rule 62(a).
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process to enforce the judgment on September 18, 2006, in clear violation of the tenday automatic stay. B. Plaintiff's Violation of the Automatic Stay Constitutes Civil Contempt.

"Actions taken in defiance of automatic stays have been treated as civil contempts, redressable as such to the injured parties." Martir Lugo v. De Jesus Saez, 721 F.2d 848, 852 (1st Cir. 1983) (citing cases); see also Martin America Credit Union v. Skinner, 917 F.2d 444, 446 (10th Cir. 1990) (discussing district court's remand to bankruptcy court with instructions to impose civil contempt sanctions for violation of automatic stay).2 In the civil contempt context, liability must be proven by clear and convincing evidence. Reliance Ins. Co. v. Mast Constr. Co., 159 F.3d 1311, 1315 (10th Cir. 1998). Thus, Defendants here have the burden of proving a valid and applicable rule, that Plaintiff knew of that rule, and that Plaintiff disobeyed it. See id. Here, there is no question that under the circumstances presented, the effect of Rule 62(a) was to impose an automatic stay on execution of, or any proceedings to enforce, the judgment for a period of ten business days from the date of entry of judgment. This meant that Plaintiff could not attempt to garnish any of the Boyces' proceeds, or initiate execution proceedings under Rule 69, until September 21, 2006. Nor is there any doubt that Plaintiff knew of the automatic stay. United States v. Windrix, 405 F.3d 1146, 1156 (10th Cir. 2005) (charging attorney with knowledge of the local procedural rules in their entirety). Finally, there is no question that Plaintiff violated
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Although Martir Lugo and the cases cited therein occurred in the bankruptcy context, the rules of procedure for bankruptcy courts have adopted Rule 62(a). Martir Lugo, 721 F.2d at 851 n.4; Fed. R. Bank. P. 7062 (incorporating Fed. R. Civ. P. 62 in adversary proceedings).

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the automatic stay by attempting to garnish the Boyces' bank proceeds, and by serving Joanne Boyce with Rule 69 interrogatories and writs of garnishment, several days before the expiration of the automatic stay. The foregoing demonstrates by clear and convincing evidence that Plaintiff is in civil contempt for his attempt to execute on the judgment in violation of Rule 62(a). Accordingly, the Rule 69 Interrogatories and garnishment papers should be stricken or withdrawn, and Plaintiff should be ordered not to initiate any execution proceedings until such time as the Court rules on Defendants' pending Motion to Stay Judgment Pending Determination of Post-Trial Motions (doc. 117). Additionally, Defendants are entitled to an award of their attorney fees incurred in connection with this motion. John Zink Co. v. Zink, 241 F.3d 1256, 1261-62 (10th Cir. 2001) ("A finding of willfulness is not required to award attorney fees in a civil contempt proceeding."). CONCLUSION For the foregoing reasons, Defendants move the Court to hold Plaintiff in civil contempt, to order Plaintiff's improper collection efforts to be withdrawn until such time as the Court rules on Defendants' pending Motion to Stay Judgment Pending Determination of Post-Trial Motions (doc. 117). Additionally, Defendants are entitled to an award of their attorney fees incurred in this motion. Finally, Defendants respectfully request a forthwith hearing concerning this motion.

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Respectfully submitted this 19th day of September, 2006.

s/John G. Lubitz John G. Lubitz HALE FRIESEN, LLP 1430 Wynkoop Street, Suite 300 Denver, Colorado 80202-6171 (720) 904-6000 Attorneys for Defendants/Counterclaimants

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CERTIFICATE OF SERVICE I hereby certify that on this 19th day of September, 2006, I caused a true and correct copy of the foregoing MOTION TO FIND PLAINTIFF IN CONTEMPT FOR VIOLATION OF FED. R. CIV. P. 62(a) to be served electronically via CM/ECF System, addressed to: Erich Schwiesow, Esq. Helen Sigmond, Esq. 311 San Juan Avenue P.O. Box 1270 Alamosa, CO 81101-7195

/s/ Ann Grossmann_________________

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