FEDERAL DEPOSIT INSURANCE CORPORATION v. AMOS et al

Filing 46

ORDER denying 39 Motion for Contempt. Ordered by US DISTRICT JUDGE CLAY D LAND on 04/03/2017. (CCL)

IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF GEORGIA
COLUMBUS DIVISION
FEDERAL DEPOSIT INSURANCE
CORPORATION, as Receiver for
GulfSouth Private Bank,

*
*

Plaintiff,

*

vs.

*

CASE NO. 4:16-cv-284 (CDL)

WILLIAM L. AMOS, JENIFER C.
*
AMOS, and WLA INVESTMENTS INC.,
*
Defendants.
*
O R D E R
Presently pending before the Court are two motions filed by
Plaintiff Federal Deposit Insurance Corporation (“FDIC-R”), as
Receiver for GulfSouth Private Bank.

First, FDIC-R filed a

motion for entry of an order requiring the production and levy
of shares Defendant William L. Amos owns in certain corporations
(ECF

No.

parties

27).

At

represented

the
that

hearing
they

on

would

the

pending

confer

in

motions,
a

good

the

faith

effort to propose a consent order to resolve this motion.

The

parties shall submit a proposed consent order by April 6, 2017.
FDIC-R also filed a Motion for Contempt (ECF No. 39).

It

argues that Defendants William L. Amos and Jenifer Amos, along
with William L. Amos & Co. (“Amos & Co.”) and Paladin Beach
Investments,

LLC

(“Paladin”),

violated

the

Granting Preliminary Injunction (ECF No. 17).

Consent

Order

Defendants deny

violating the preliminary injunction order.

For the reasons set

forth below, the Court concludes that FDIC-R has not established
by clear and convincing evidence that Defendants violated the
court

order.

Accordingly,

FDIC-R’s

motion

for

contempt

is

denied.
DISCUSSION
To establish civil contempt, FDIC-R must show, by clear and
convincing

evidence,

that

Defendants

violated

a

court

order.

“The clear and convincing evidence must establish that: (1) the
allegedly violated order was valid and lawful; (2) the order was
clear and unambiguous; and (3) the alleged violator had the
ability to comply with the order.”
484

F.3d

Chierico,

1288,

Defendants

206

1291
F.3d

argue

(11th
1378,

that

Cir.
1383

they

Ga. Power Co. v. N.L.R.B.,
2007)
(11th

did

not

(citing
Cir.

violate

McGregor

2000)).
any

v.

Here,

clear

and

unambiguous provision in the preliminary injunction order.
I.

Expenditures Made By Amos & Co.
The preliminary injunction order, which was prepared and

agreed to by the parties, states that Amos & Co. may not spend
its income “other than to pay ordinary business expenses of Amos
& Co. in accordance with the budget attached [to the preliminary
injunction order] as Exhibit C.”
Inj. ¶ 4(b), ECF No. 17.
relevant

“budget,”

Consent Order Granting Prelim.

Exhibit C, which is described as the

lists

three

2

categories

of

expenses—car

payments, life insurance payments, and taxes.

But it includes

no dollar amounts for any category and instead has blank lines
next to each “budget” category.

Notwithstanding the ambiguity

created by the absence of any budget amounts in the so-called
“budget,” FDIC-R argues that Amos & Co. violated the preliminary
injunction order by making the following expenditures: 1) more
than $100,000 in premiums on a whole life insurance policy on
Mr. Amos’s life; 2) legal expenses of more than $75,000; 3) a
$15,000

loan

to

Paladin;

4) credit

card

payments

totaling

approximately $2,200; and 5) payments to Verizon totaling nearly
$900.1
A.

The Court will address each expenditure in turn.
Life Insurance Premiums

FDIC-R

acknowledges

that

the

parties

contemplated

certain life insurance premium payments would be permitted.

that
But

it maintains that the amounts paid by Amos & Co. were excessive
and thus not an ordinary business expense.

Amos & Co. made

premium payments of roughly $16,000 per month on whole life
insurance policies on Mr. Amos’s life.

1

The ultimate beneficiary

FDIC-R also claims that Amos & Co. made unauthorized withdrawals
totaling approximately $388,000 in October 2016 and made unauthorized
withdrawals totaling approximately $90,000 in November 2016. Based on
the Court’s review of the record, much of the $388,000 “withdrawal”
was for tax payments and other expenditures that were made before
entry of the preliminary injunction order.
As for the rest of the
October 2016 “withdrawal,” almost all of it eventually made its way
back into the Amos & Co. bank account, as did most of the November
2016 “withdrawal.” And FDIC-R did not explain how expenditure of the
amounts that were not redeposited violated the preliminary injunction
order.

3

of these policies is Mrs. Amos, the current owner of Amos & Co.
According to Defendants, Mr. Amos is the president of Amos &
Co., and Amos & Co. began paying the premiums on the policies
several years before entry of the preliminary injunction order.
The
clearly

plain
omits

language
any

of

dollar

the

preliminary

limitation

on

injunction

the

amount

insurance premiums that may be paid by Amos & Co.

order

of

life

The only

limitation is that such payments must be an ordinary business
expense of Amos & Co.

While the life insurance policies and

corresponding premiums certainly fall within the upper range for
such

benefits,

insufficient

evidence

has

been

presented

to

convince the Court that the premiums clearly are not an ordinary
business expense such that they constitute a violation of the
Court’s order.

The parties contemplated that Amos & Co. would

be permitted to continue paying the life insurance premiums that
it had been paying for several years, although FDIC-R apparently
did not know how much the premiums were or any other details
about the life insurance.

If FDIC-R wanted to limit the monthly

premium payments, it should have filled in the empty blank on
the budget.

Even if parol evidence supported FDIC-R’s position

that the premium payments were excessive, FDIC-R has not met its
burden of proving by clear and convincing evidence that the
preliminary

injunction

order

4

clearly

and

unambiguously

prohibited

the

premium

payments.

Therefore,

those

payments

cannot be the basis for a contempt finding.
B.

Other Expenses

FDIC-R argues that other expenditures made by Amos & Co.
that

fell

outside

the

categories

listed

in

Exhibit

C—life

insurance premiums, car payments, and taxes—were prohibited by
the preliminary injunction order.

These expenditures include:

1) legal expenses of more than $75,000; 2) a $15,000 loan to
Paladin Beach Investments, LLC; 3) credit card payments totaling
approximately $2,200; and 4) payments to Verizon totaling nearly
$900.
As noted previously, for there to be a finding of contempt,
the order that was allegedly violated must be unambiguous and
the evidence of the violation must be clear and convincing.

The

parties’ failure to include a completed budget as an exhibit to
the consent preliminary injunction order created an ambiguity
regarding

Amos

&

Co.’s

permitted

expenditures.

One

interpretation of that provision is that the parties agreed that
expenditures

could

only

be

made

categories listed in Exhibit C.

within

the

three

budget

But another equally plausible

interpretation could be that the parties never reached a meeting
of the minds on Exhibit C, and thus it should be ignored.

If

Exhibit C is ignored, Amos & Co. was permitted to make any
expenditure that was within the ordinary course of its business.

5

Unconvinced

that

any

parol

evidence

makes

the

agreement

any

clearer, the Court finds for purposes of the pending motion for
contempt that Amos & Co. can be found in contempt only if FDIC-R
established by clear and convincing evidence that Amos & Co.’s
expenditures were not “ordinary business expenses.”
FDIC-R failed to carry this high burden.

Defendants assert

that Amos & Co. routinely paid these types of expenses in the
ordinary

course

of

its

business

preliminary injunction order.

prior

to

entry

of

the

FDIC-R argues that these types of

expenses are not logical or necessary for a business like Amos &
Co.,

but

the

parties

did

not

define

business” to have such a narrow meaning.
present

any

routinely
business.

evidence

pay

such

to

establish

expenses

in

that

the

“ordinary

course

of

And, FDIC-R did not
Amos

ordinary

&

Co.

course

did

not

of

its

It is not clear for purposes of a contempt citation

that the preliminary injunction order clearly and unambiguously
prohibited

the

expenditures

for

legal

expenses,

a

loan

to

Paladin, credit card bills, and Verizon bills.
The Court observes, however, that while FDIC-R failed to
carry its burden of proof to establish contempt, the Court is
skeptical as to whether all of these expenditures, particularly
the loan to Paladin, were ordinary business expenses of Amos &
Co.
the

Accordingly, the Court confirms its oral order issued at
hearing

that

Amos

&

Co.

shall

6

not

make

any

additional

payments, loans, or transfers to Paladin without first obtaining
permission from the Court.
II.

Expenditures Made By Paladin
Under

the

preliminary

injunction

order,

Paladin

may

not

take several actions with regard to its real property in Biloxi,
Mississippi.

Consent Order Granting Prelim. Inj. ¶ 6.

Paladin

also may not spend income generated by the Biloxi property, id.
¶ 6(b), and may not spend money that was in its possession as of
the date of the preliminary injunction order, id ¶ 6(e).
FDIC-R

contends

injunction

order

$1,100

property

on

in

that

Paladin

November
taxes

2016

and

violated
by

the

spending

homeowners’

preliminary
approximately

association

dues

associated with an Escambia County, Florida condominium owned by
Paladin.2

During the same month, two deposits totaling $3,600

were

to

made

Paladin’s

account.

It

is

not

clear

from

the

present record whether these deposits were income generated by
the Biloxi property, income generated by the Escambia County
property, or income from some other source.
The

preliminary

injunction

order

does

not

clearly

and

unambiguously prohibit Paladin from spending income generated by
properties other than the Biloxi property.
2

It also does not

FDIC-R contends that Paladin “withdrew” $3,101.99 from its account
but ignores the fact that a check for $1,849.23 was returned for
insufficient funds and was thus not withdrawn.
Defendants presented
evidence that approximately $1,100 was used to pay property taxes and
homeowners’ association dues.
It appears that the remaining $90.96
was for bank charges.

7

clearly and unambiguously prohibit Paladin from spending money
it

receives

after

entry

of

the

preliminary

injunction

unless that income was generated by the Biloxi property.

order
Given

that the present record does not establish the source of the
approximately

$1,100

Paladin

withdrew

in

November

2016,

the

Court finds that FDIC-R has not met its burden of proving by
clear and convincing evidence that these expenditures violated
the preliminary injunction order.

The Court declines to hold

Paladin in contempt for making these payments.
III. Reprieve, Not Pardon
Defendants
should

not

victory.

have

avoided

misinterpret

this

a

contempt

temporary

finding.
reprieve

But
as

they

ultimate

The Court has simply found that FDIC-R did not carry

the heavy burden for establishing contempt.

FDIC-R still holds

what appears to be a substantial valid judgment, and it has
multiple
appears

available
to

have

remedies

to

collect

attempted

in

good

that

faith

judgment.
to

negotiate

It
a

compromise that would maintain the status quo until this action
can be heard on the merits.

Such consent orders are often

preferable to one imposed by the Court without the agreement of
the parties.

Today’s ruling should not discourage the parties

from returning to the negotiating table to hammer out a refined,
clear, and uambiguous consent order that maintains the status
quo in a manner that is more advantageous to the parties than a

8

blunt order issued by the Court that may be authorized under the
law

but

detrimental

litigation.

to

all

parties

associated

with

this

The Court hastens to add, however, that it does not

intend to place undue pressure on the parties to reach such an
agreement, and nothing in today’s order prevents FDIC-R from
pursuing any other remedies under the law.
CONCLUSION
For the reasons set forth above, the Court denies FDIC-R’s
motion for contempt (ECF No. 39).

The Court defers ruling on

FDIC-R’s motion for entry of an order requiring the production
and levy of shares Defendant William L. Amos owns in certain
corporations

(ECF

No.

27).

The

parties

shall

submit

their

proposed consent order on that motion by April 6, 2017.
IT IS SO ORDERED, this 3rd day of April, 2017.
s/Clay D. Land
CLAY D. LAND
CHIEF U.S. DISTRICT COURT JUDGE
MIDDLE DISTRICT OF GEORGIA

9