FEDERAL DEPOSIT INSURANCE CORPORATION v. AMOS et al
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
FEDERAL DEPOSIT INSURANCE
CORPORATION, as Receiver for
GulfSouth Private Bank,
CASE NO. 4:16-cv-284 (CDL)
WILLIAM L. AMOS, JENIFER C.
AMOS, and WLA INVESTMENTS INC.,
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
effort to propose a consent order to resolve this motion.
parties shall submit a proposed consent order by April 6, 2017.
FDIC-R also filed a Motion for Contempt (ECF No. 39).
argues that Defendants William L. Amos and Jenifer Amos, along
with William L. Amos & Co. (“Amos & Co.”) and Paladin Beach
Granting Preliminary Injunction (ECF No. 17).
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
To establish civil contempt, FDIC-R must show, by clear and
“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.”
Ga. Power Co. v. N.L.R.B.,
unambiguous provision in the preliminary injunction order.
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.
Consent Order Granting Prelim.
Exhibit C, which is described as the
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
approximately $2,200; and 5) payments to Verizon totaling nearly
The Court will address each expenditure in turn.
Life Insurance Premiums
certain life insurance premium payments would be permitted.
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.
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
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.
insurance premiums that may be paid by Amos & Co.
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
convince the Court that the premiums clearly are not an ordinary
business expense such that they constitute a violation of the
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
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
cannot be the basis for a contempt finding.
FDIC-R argues that other expenditures made by Amos & Co.
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
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.
parties’ failure to include a completed budget as an exhibit to
the consent preliminary injunction order created an ambiguity
interpretation of that provision is that the parties agreed that
categories listed in Exhibit C.
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.
Exhibit C is ignored, Amos & Co. was permitted to make any
expenditure that was within the ordinary course of its business.
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.
that Amos & Co. routinely paid these types of expenses in the
preliminary injunction order.
FDIC-R argues that these types of
expenses are not logical or necessary for a business like Amos &
business” to have such a narrow meaning.
And, FDIC-R did not
It is not clear for purposes of a contempt citation
that the preliminary injunction order clearly and unambiguously
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 &
Accordingly, the Court confirms its oral order issued at
payments, loans, or transfers to Paladin without first obtaining
permission from the Court.
Expenditures Made By Paladin
take several actions with regard to its real property in Biloxi,
Consent Order Granting Prelim. Inj. ¶ 6.
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).
associated with an Escambia County, Florida condominium owned by
During the same month, two deposits totaling $3,600
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.
unambiguously prohibit Paladin from spending income generated by
properties other than the Biloxi property.
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.
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.
clearly and unambiguously prohibit Paladin from spending money
unless that income was generated by the Biloxi property.
that the present record does not establish the source of 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
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
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
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
blunt order issued by the Court that may be authorized under the
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.
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
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
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