Walnut Creek Manor, LLC v. Mayhew Center, LLC et al

Filing 334

ORDER by Judge Claudia Wilken DENYING DEFENDANTS 321 MOTION TO VACATE; SETTING HEARING ON PLAINTIFFS MOTION FOR CONTEMPT SANCTIONS. (ndr, COURT STAFF) (Filed on 12/10/2013)

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IN THE UNITED STATES DISTRICT COURT

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FOR THE NORTHERN DISTRICT OF CALIFORNIA

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WALNUT CREEK MANOR, LLC,
Plaintiff,

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United States District Court
For the Northern District of California

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No. C 07-5664 CW

v.
MAYHEW CENTER, LLC, and DEAN
DUNIVAN,
Defendants.
________________________________/

ORDER DENYING
DEFENDANT’S MOTION
TO VACATE; SETTING
HEARING ON
PLAINTIFF’S MOTION
FOR CONTEMPT
SANCTIONS (Docket
Nos. 305, 321)

Plaintiff Walnut Creek Manor, LLC, moves for contempt

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sanctions against Defendants Dean Dunivan and Mayhew Center, LLC.

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Dunivan, proceeding pro se, opposes the motion and moves to vacate

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the injunction issued in November 2010 pursuant to the parties’

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settlement agreement.1

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considering the parties’ submissions, the Court now denies

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Dunivan’s motion to vacate.

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Plaintiff’s motion until the parties have submitted further

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briefing and presented oral argument on the matter.

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Plaintiff opposes Dunivan’s motion.

After

The Court will defer its decision on

BACKGROUND
The relevant facts and procedural history of this case are
set forth at length in the Court’s prior orders.

See Docket Nos.

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Although Dunivan seeks once again to represent Mayhew Center, as
explained in prior orders, the local rules preclude him from doing so
because he is not an attorney. Civil L.R. 3-9(b) (“A corporation,
unincorporated association, partnership or other such entity may appear
only through a member of the bar of this Court.”); Docket No. 296, Order
Denying Motion to Enforce Settlement Agreement, at 1 n.1 (explaining
Civil Local Rule 3-9); Docket No. 315, Order Denying Motion for
Reconsideration and Extension of Time, at 1 n.1 (same); see also United
States v. High Country Broad. Co., Inc., 3 F.3d 1244, 1245 (9th Cir.
1993) (“A corporation may appear in federal court only through licensed
counsel.”).

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287, 296, 315.

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summary of the background relevant to the instant motions.

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Accordingly, this order provides only a brief

In October 2010, the parties settled this action by

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stipulating to the entry of an injunction requiring Defendants to

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remedy the tetrachloroethylene (PCE) contamination that they

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caused on Plaintiff’s property.

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Proposed Injunction, at 1-3.

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and signed the parties’ proposed injunction on November 23, 2010.

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Docket No. 273, Order Granting Stipulation.

Docket No. 270, Stipulation &

The Court approved the stipulation

Under the terms of

United States District Court
For the Northern District of California

10

that injunction, Defendants were required to complete cleanup and

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abatement of the PCE contamination within two years of the date

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the injunction was entered.

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failed to meet that deadline, Plaintiff would be entitled to

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recover whatever funds remained in an escrow account that

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Defendants created to fund their cleanup and abatement efforts.

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Id. at 8.

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Id., Injunction, at 3-6.

If they

On November 21, 2012, two days before the deadline set in the

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injunction, Defendants moved for an extension of time to complete

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cleanup and abatement.

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motion because Defendants failed to demonstrate good cause for

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their inability to meet the deadline.

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noted that Plaintiff had presented evidence of “multiple instances

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where Defendants’ own conduct led to delays in the remediation

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process.”

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Extension of Time, at 2.

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hire a licensed geotechnical consultant, provide mandatory

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insurance forms for their contractors, and commence construction

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on their own property for several months after the injunction was

Docket No. 279.

The Court denied that

In particular, the Court

Docket No. 287, Feb. 1, 2013 Order Denying Motion for
This included Defendants’ failure to

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entered.

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the Court permitted Defendants to continue using the escrow funds

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to finance their cleanup and abatement efforts because Plaintiff

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represented that it did not wish to recover the escrow funds at

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that time.

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and abatement obligations by July 31, 2013 and directed Plaintiff

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not to seek access to the escrow account until that date.

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Nevertheless, despite their culpability for the delays,

The Court ordered Defendants to complete their cleanup

On July 30, 2013, after Defendants failed to complete cleanup
and abatement, Plaintiff filed its motion for sanctions and

United States District Court
For the Northern District of California

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contempt.

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the injunction.

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information for the Court to decide Dunivan’s motion and resolve

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certain elements of Plaintiff’s motion without oral argument.

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However, because more information and a hearing are required to

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resolve the other elements of Plaintiff’s motion, the Court will

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hold a hearing to address those matters separately.

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One month later, on August 28, Dunivan moved to vacate
The parties’ submissions contained sufficient

LEGAL STANDARD
A district court has the inherent authority to enforce

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compliance with its orders through a civil contempt proceeding.

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Int’l Union, UMWA v. Bagwell, 512 U.S. 821, 827–28 (1994).

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contempt sanction is considered civil if it “is remedial, and for

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the benefit of the complainant.”

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considered remedial if it either “coerce[s] the defendant into

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compliance with the court’s order, [or] . . . compensate[s] the

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complainant for losses sustained.”

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Workers, 330 U.S. 258, 303–304 (1947).

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v. Execuair Corp., 953 F.2d 510, 517 (9th Cir. 1992).

Id.

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3

A

A contempt fine is

United States v. United Mine
See also Whittaker Corp.

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“The standard for finding a party in civil contempt is well

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settled: The moving party has the burden of showing by clear and

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convincing evidence that the [non-moving party] violated a

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specific and definite order of the court.”

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Media, LLC, 179 F.3d 1228, 1239 (9th Cir. 1999) (quoting Stone v.

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City & County of San Francisco, 968 F.2d 850, 856 n.9 (9th Cir.

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1992)).

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faith exception to the requirement of obedience to a court order.”

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In re Dual–Deck Video Cassette Recorder Antitrust Litig., 10 F.3d

FTC v. Affordable

The contempt “need not be willful, and there is no good

United States District Court
For the Northern District of California

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693, 695 (9th Cir. 1993).

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contempt if his action appears to be based on a good faith and

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reasonable interpretation of the court’s order.”

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formatting and quotations omitted).

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with the court order is a defense to civil contempt, and is not

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vitiated by ‘a few technical violations’ where every reasonable

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effort has been made to comply.”

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Inc. v. Falcon Foam Plastics, Inc., 689 F.2d 885, 891 (9th Cir.

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1982)).

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“But a person should not be held in

Id. (internal

“‘Substantial compliance’

Id. (citing Vertex Distrib.,

Thus, the Court may grant a motion for an order of contempt

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if it finds that Defendants (1) violated the court order,

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(2) beyond substantial compliance, (3) not based on a good faith

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and reasonable interpretation of the order, (4) by clear and

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convincing evidence.

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burden, the burden “shifts to the contemnors to demonstrate why

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they were unable to comply” with the court order.

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at 856 n.9 (citing Donovan v. Mazzola, 716 F.2d 1226, 1240 (9th

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Cir. 1983)). “They must show they took every reasonable step to

Id.

Once the moving party has met its

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4

Stone, 968 F.2d

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comply.”

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(9th Cir. 1976)).

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Id. (citing Sekaquaptewa v. MacDonald, 544 F.2d 396, 406

When a court imposes civil contempt sanctions, “[g]enerally,

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the minimum sanction necessary to obtain compliance is to be

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imposed.”

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establish appropriate sanctions.”

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F.3d 683, 695–96 (9th Cir. 2010) (citing Richmark Corp. v. Timber

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Falling Consultants, 959 F.2d 1468, 1473 (9th Cir. 1992)).

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the remedial purpose of the sanction, a finding of contempt must

Id.

However, “the district court retains discretion to
United States v. Bright, 596

“Given

United States District Court
For the Northern District of California

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be accompanied by conditions by which contempt may be purged,

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spelled out in either the original order or the contempt order.”

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Id.

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adversary “for injuries resulting from the contemnor’s

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noncompliance” with an earlier court order.

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Longshore & Warehouse Union, 721 F.3d 1122, 1131 (9th Cir. 2013).

The court may also order the contemnor to compensate its

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Ahearn v. Int’l

DISCUSSION

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Because Plaintiff’s motion for contempt sanctions is premised

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on the enforceability of the November 2010 injunction, the Court

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considers Dunivan’s motion to vacate the injunction before turning

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to Plaintiff’s motion.

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I.

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Dunivan’s Motion to Vacate
Dunivan moves to vacate the injunction under Federal Rule of

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Civil Procedure 60(b)(1), which permits a party to seek relief

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from a final order for “mistake, inadvertence, surprise, or

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5

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excusable neglect.”2

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the magistrate judge assigned to this case, erred by failing to

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obtain Dr. Clifford Tschetter’s approval of the parties’ October

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2010 settlement agreement.

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party in this suit who Dunivan alleges was previously affiliated

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with Mayhew Center, should have been required to state his

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approval of the settlement on the record before the Court signed

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the parties’ proposed injunction.

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reasons.

United States District Court
For the Northern District of California

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Dunivan argues that this Court, as well as

He contends that Tschetter, a non-

This argument fails for several

First, as a threshold matter, Dunivan’s motion is not timely.

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Rule 60(c) requires that any motion under Rule 60(b)(1) be filed

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“no more than a year after the entry of the judgment or order or

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the date of the proceeding” that the movant seeks to challenge.

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Here, Dunivan seeks to challenge an injunction that was entered

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more than three years ago.

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60(c).

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This is not permitted under Rule

Second, Dunivan fails to cite any precedent requiring a non-

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party to approve a settlement agreement before an order entered

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pursuant to that settlement agreement becomes binding.

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he quotes a lengthy passage from Ebates Performance Mktg. Inc. v.

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Integral Technologies Inc., 2013 WL 4427115 (N.D. Cal.),

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Although

Dunivan states that his motion is also filed pursuant to Rule
60(d)(1). This provision is inapposite here because it protects a
court’s power to “entertain an independent action to relieve a party
from a judgment, order, or proceeding.” Fed. R. Civ. P. 60(d)(1)
(emphasis added). Dunivan has not filed an “independent action” here
but, rather, seeks relief from a prior order issued in this action.
Furthermore, even if Dunivan had filed an independent action to
challenge the 2010 injunction, he would not meet the “demanding
standard” that is required for relief under Rule 60(d)(1). United
States v. Beggerly, 524 U.S. 38, 46 (1998) (noting that “an independent
action should be available only to prevent a grave miscarriage of
justice”).

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describing a federal court’s equitable power to enforce settlement

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agreements, he fails to explain how that passage is applicable

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here.

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a situation where the parties failed to execute a written

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settlement agreement and “‘material facts concerning the existence

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or terms of an agreement to settle [were] in dispute.’”

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(quoting Callie v. Near, 829 F.2d 888, 890 (9th Cir. 1987)).

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contrast, all of the parties in this case signed a written

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settlement agreement, the terms of which are not in dispute.

United States District Court
For the Northern District of California

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The passage Dunivan cites makes clear that Ebates addressed

Id. at *1
In

Ebates is therefore inapposite.

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Finally, Dunivan’s motion fails because the November 2010

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injunction was drafted jointly by the parties -- all of whom were

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represented by counsel at the time -- and entered pursuant to a

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stipulation.

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injunction, he could have simply refrained from signing the

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settlement agreement.

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Mayhew Center remain bound by its terms.

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II.

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If Dunivan had any objections to the terms of the

He did not and, therefore, both he and

Plaintiff’s Motion for Sanctions and Contempt
Plaintiff requests the following forms of relief in its

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motion: recovery of whatever funds remain in the escrow account,

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an order of contempt directing Defendants to complete cleanup and

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abatement and to pay back their recent withdrawals from the escrow

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account, the appointment of a special master or other monitor to

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oversee Defendants’ cleanup and abatement efforts, and reasonable

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attorneys’ fees.

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For reasons explained more fully below, the Court defers

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judgment on Plaintiff’s requests for an order of contempt and a

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special master until the parties have had an opportunity to submit
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further briefing and present oral argument on these matters.

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Court does not, however, defer judgment on Plaintiff’s request to

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recover the remaining escrow funds and attorneys’ fees because the

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November 2010 injunction expressly provides for this relief.

The

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A.

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The November 2010 injunction required Defendants to reduce

Recovery of Remaining Funds in Escrow Account

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the levels of PCE concentration in Plaintiff’s soil, soil vapor,

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and groundwater to “the most stringent standards or levels for

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residential properties articulated by the Regional Water Quality

United States District Court
For the Northern District of California

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Control Board, San Francisco Bay Region.”

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injunction stated that, if Defendants failed to achieve these

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“residential standards” by November 23, 2012, “any remaining

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ESCROW FUNDS shall be paid to [Plaintiff].”

Injunction at 3.

The

Id. at 8.

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Plaintiff has provided ample evidence here to show that

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Defendants failed to achieve the residential standards required by

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the injunction.

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Milt Eberle, one of the managers of Walnut Creek Manor, describing

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how Defendants have failed to commence any significant work on

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Plaintiff’s property since the Court extended their cleanup and

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abatement deadline.

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(“Since the Court issued its order extending the time-frame for MC

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[Mayhew Center] to complete the goals of the Injunction Order on

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February 1, 2013, MC has done nothing to pursue remediation of the

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[Walnut Creek Manor] property.”).

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Defendants have not conducted any recent soil tests on Plaintiff’s

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property and appear to have abandoned the interim remedial action

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plan (IRAP) that they had agreed to implement in October 2012.

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Id.

For instance, it submitted a declaration from

Docket No. 310, Declaration of M. Eberle ¶ 6

Specifically, Eberle noted that

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Eberle’s account is consistent with that of Plaintiff’s

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environmental expert, Scott Warner, who has been monitoring

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Defendants’ cleanup and abatement efforts since the injunction was

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entered.

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Warner, a licensed engineering geologist, asserted in his

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declaration that Defendants not only failed to reduce the PCE

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levels in Plaintiff’s soil and groundwater to the requisite

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residential standards, but also failed to exercise “reasonable

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diligence” in seeking to achieve those standards.

Docket No. 309, Declaration of S. Warner ¶¶ 1-4.

Id. ¶ 11 (“In

United States District Court
For the Northern District of California

10

my opinion, had MC acted with reasonable diligence, it could have

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completed the remediation plan called-for in the October 2012

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Interim Remedial Action Plan (IRAP) before July 31, 2013.”).

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further asserts that the limited work that Defendants have

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undertaken over the past three years -- such as a July 2012 soil

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test -- has been rendered useless by Defendants’ recent decision

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to abandon the October 2012 IRAP.

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related to the IRAP has any usefulness in the absence of the work

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plan set forth in the IRAP.”).

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He

Id. ¶ 17 (“None of the work

Plaintiff has also submitted external documentation of

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Defendants’ intransigence.

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that the Regional Water Quality Control Board sent Defendants in

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January 2013 notifying them of their failure to submit a mandatory

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report on their progress.

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for Failure to Submit Technical Report.

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Defendants’ failure to implement the October 2012 IRAP and

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specifically noted that “Mayhew has not begun the excavation

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activities -- on its own property or elsewhere -- that would be

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necessary in order to complete the report.”

It points, for instance, to a letter

Kelly Decl., Ex. B, Notice of Violation

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The letter highlighted

Id. at 2.

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Dunivan does not dispute the accuracy of any of this evidence

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nor does he offer any evidence of his own to suggest that

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Defendants made reasonable efforts to comply with the November

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2010 injunction or the February 2013 order.

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that Plaintiff’s counsel deliberately sought to prevent him from

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accessing the escrow account, he fails to cite any specific documents in

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the record to support this allegation.

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suggests that Plaintiff facilitated Defendants’ access to the

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escrow account by deciding not to seek recovery of those funds in

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Although he asserts

If anything, the record

United States District Court
For the Northern District of California

10

November 2012, when it was first entitled to do so under the

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injunction.

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Plaintiff represented at that time that it did “not wish to

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recover the funds in the escrow account but rather wishe[d] to

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leave them available [to Defendants] for prompt cleanup and

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abatement of its property.”

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second opportunity to use the escrow funds to satisfy their

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settlement obligations, Defendants failed to make any significant

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progress towards reducing the PCE contamination.

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is entitled to whatever money remains in the escrow account, as

As this Court observed in its February 2013 order,

Docket No. 287, at 3.

Despite this

Thus, Plaintiff

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Dunivan submitted more than four-hundred pages of exhibits with
his opposition brief. Most of these exhibits are unlabeled and filed in
non-chronological order. What’s more, Dunivan fails to cite specific
page numbers for any exhibit cited in his brief. Nevertheless,
Dunivan’s allegation of obstruction by Plaintiff’s counsel appears to be
based on a letter that Plaintiff’s counsel sent to Defendants’ counsel
in June 2012 objecting to one of Defendants’ requests for disbursement
from the escrow account. See Docket No. 328-6, Dunivan Decl., Ex. 15
(part 2), at 6-8. Because this objection was based solely on legitimate
concerns about the size of Defendants’ disbursement request -- and noted
various discrepancies between the size of Defendants’ disbursement
request and the billing records they provided to support the request -this letter does not demonstrate willful obstruction by Plaintiff’s
counsel.

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provided by the express terms of the injunction.4

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remain obliged to complete cleanup and abatement.

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B.

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Defendants

Order of Contempt Directing Cleanup and Abatement and
Requiring Defendants to Repay Escrow Funds

Section I of the November 2010 injunction states that this
5
Court shall retain jurisdiction to enforce the terms of the
6
injunction.

Injunction at 8.

As explained in detail above,

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Plaintiff has provided undisputed documentation that Defendants
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have not reduced the levels of PCE in Plaintiff’s soil, soil
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vapor, and groundwater to the residential standards set forth in
10
United States District Court
For the Northern District of California

the injunction.

This documentation constitutes “clear and

11
convincing evidence” that Defendants failed to satisfy their
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obligations under the injunction.

Defendants have not shown that

13
this failure was “based on a good faith and reasonable
14
interpretation of the court’s order.”

In re Dual–Deck Video

15
Cassette Recorder Antitrust Litig., 10 F.3d at 695.
16
Nevertheless, Defendants will be given one final opportunity
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to explain why they should not be held in contempt.

If they fail

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to do so, they may be ordered to repay all of the escrow funds
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that they spent on the incomplete October 2012 IRAP.

This

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sanction would serve the traditional purposes of civil contempt by
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compensating Plaintiff for the inconvenience caused by the ongoing
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contamination and enabling it to take steps to begin remedying the
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contamination on its own.

See Falstaff Brewing Corp. v. Miller

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Brewing Co., 702 F.2d 770, 778 (9th Cir. 1983) (noting that civil
25
contempt sanctions are “characterized by the court’s desire to
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The parties agree that more than $900,000 of the original $1.15
million remains in the escrow account. See Kelly Decl. ¶ 12; Dunivan
Decl., Ex. 1.

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compel obedience to a court order, or to compensate the

2

contemnor’s adversary for the injuries which result from the

3

noncompliance.” (citations omitted)).

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further coercive sanctions on Defendants to ensure compliance with

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the injunction.

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sanctions, or those penalties designed to compel future compliance

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with a court order, are considered to be coercive and avoidable

8

through obedience.”).

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The Court may also impose

Int’l Union, 512 U.S. at 827 (“[C]ivil contempt

The Court will hold a hearing to address whether Defendants

United States District Court
For the Northern District of California

10

have made appropriate use of the escrow funds and whether their

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efforts to carry out the October 2012 IRAP were productive.

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to the hearing, Defendants may submit billing records,

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contractors’ receipts, and any other records documenting their

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expenditures and progress in implementing the October 2012 IRAP.

Prior

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C.

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Plaintiff requests the appointment of a special master to

Appointment of Special Master

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oversee and direct Defendants’ future cleanup and abatement

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efforts.

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master but asks that the special master’s “sole function” be to

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“approve or disapprove all bills submitted for remediation.”

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Docket No. 326, Dunivan Opp. Mot. Sanctions, at 2.

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Dunivan likewise requests the appointment of a special

“The appointment of a Special Master, with appropriately

23

defined powers, is within both the inherent equitable powers of

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the court and the provisions of Rule 53 of the Federal Rules of

25

Civil Procedure.”

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Cal. 1995).

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master only if the parties have stipulated to the terms of such an

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appointment or if the appointment is warranted by “some

Madrid v. Gomez, 889 F. Supp. 1146, 1282 (N.D.

Typically, a district court may appoint a special

12

1

exceptional condition.”

2

v. City & Cnty. of San Francisco, 2007 WL 3306526, at *9 (N.D.

3

Cal.).

4

Fed. R. Civ. P. 53(a)(1)(b)(i); Harmston

The parties have not identified any individuals to serve as

5

special master here nor have they stipulated to a specific set of

6

matters for the special master to oversee.

7

defers its decision on whether to appoint a special master until

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the hearing on Plaintiff’s contempt motion.

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of the parties must submit the names of three nominees willing to

The Court therefore

In the interim, each

United States District Court
For the Northern District of California

10

serve as special master and a brief statement outlining the

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special master’s proposed responsibilities.

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D.

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The November 2010 injunction expressly provides that, if

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either party files a motion with the Court to resolve any disputes

15

regarding the “interpretation, application, or enforcement” of the

16

injunction, the prevailing party shall recover its reasonable

17

attorneys’ fees and costs.

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Attorneys’ Fees

Injunction at 8.

Accordingly, Plaintiff is entitled to recover its reasonable

19

attorneys’ fees and costs expended in opposing (1) Defendants’

20

motion for an extension of time to complete cleanup and abatement,

21

Docket No. 279; (2) Dunivan’s motion to enforce the settlement

22

agreement, Docket No. 288; (3) Dunivan’s motion for

23

reconsideration, Docket No. 297; (4) Dunivan’s motion for an

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additional extension of time, Docket No. 304; and (5) Dunivan’s

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motion to vacate the injunction, Docket No. 321.

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Although Plaintiff has provided a declaration from Eberle

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stating that it expended “approximately $340,177.41” in attorneys’

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fees and costs, it has not provided any itemized billing records
13

1

or hourly rates to support that assertion.

2

therefore provide this documentation of its attorneys’ fees and

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costs.

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Plaintiff must

CONCLUSION

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For the reasons set forth above, Dunivan’s motion to vacate

6

the injunction (Docket No. 321) is DENIED and Plaintiff’s motion

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for contempt sanctions (Docket No. 305) will be heard after

8

further briefing.

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declaration under Civil Local Rule 7.3(d) is OVERRULED as moot.

Plaintiff’s objection to Dunivan’s late-filed

United States District Court
For the Northern District of California

10

The declaration consists of inadmissible hearsay, unsupported

11

allegations, and argument, none of which suffices to alter the

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outcome of this case.

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The Court will hold a hearing at 2:00 p.m. on Thursday,

14

January 23, 2014 to determine whether a special master should be

15

appointed and whether Defendants should be held in civil contempt

16

for their failure to complete cleanup and abatement of the PCE

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contamination on Plaintiff’s property.

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By December 30, 2013, Defendants must submit a list with the

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names, qualifications, and fees of three nominees willing to serve

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as special master along with a brief description, not to exceed

21

one page, of the special master’s proposed oversight

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responsibilities.

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billing records, contractors’ receipts, and other evidence

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documenting their efforts to implement the October 2012 IRAP.

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of these records must be filed in chronological order, clearly

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labeled, paginated, and accompanied by a declaration, sworn under

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penalty of perjury, verifying their accuracy.

Defendants should also submit by that date any

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14

All

Defendants shall

1

not submit any exhibits that do not provide documentary evidence

2

of their efforts to implement the October 2012 IRAP.

3

By January 8, 2014, Plaintiff may submit a five-page brief

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responding to Defendants’ evidence.

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by that date its own list of three nominees willing to serve as

6

special master along with their qualifications and fees and a

7

brief description, not to exceed one page, of the special master’s

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proposed oversight responsibilities.

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Plaintiff should also submit

Pursuant to the parties’ settlement agreement, whatever funds

United States District Court
For the Northern District of California

10

remain in the escrow account will be turned over to Plaintiff.

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Effective immediately, Defendants may not draw upon those funds.

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However, pending the January 23, 2014 hearing, the funds shall

13

remain in escrow.

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Plaintiff is entitled to recover its reasonable attorneys’

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fees and costs expended in opposing the five motions listed above.

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It must therefore provide appropriate documentation to support its

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fee request, including itemized billing records and its attorneys’

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hourly rates, by December 30, 2013.

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eight-page opposition to the amount of Plaintiff’s fee request by

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January 8, 2014.

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Defendants may submit an

As stated in the injunction, the Court will enter final

22

judgment only upon the stipulation of the parties or upon a

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finding that Defendants have completed their obligations under the

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injunction.

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IT IS SO ORDERED.

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Dated:

12/10/2013

CLAUDIA WILKEN
United States District Judge
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