First Mariner Bank v. The Resolution Law Group, P.C.

Filing 260

MEMORANDUM. Signed by Magistrate Judge Susan K. Gauvey on 4/28/14. (jnls, Deputy Clerk)

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
FIRST MARINER BANK,

*

Plaintiff

*

v.

*

THE RESOLUTION LAW GROUP,
P.C., et al.,

CIVIL NO.

MJG-12-1133

*
*

Defendants.
*
*

*

*

*

*

*

*

*

*

*

*

*

Memorandum
By order dated April 22, 2014, the Court granted nunc pro
tunc effective February 21, 2014, Plaintiff’s motion for entry
of civil contempt order (ECF No. 202).

(ECF No. 258).

This

memorandum sets forth the grounds for that order in greater
detail.

Additionally, Defendants have filed a motion to purge

contempt

(ECF

No.

256),

and

for

the

reasons

stated

herein,

Defendants’ motion will be GRANTED.
On December 16, 2013, Plaintiff filed its motion for entry
of

civil

Defendants,

contempt
The

order

Resolution

(ECF
Law

No.

202),

Group,

P.C.

seeking
and

R.

to

hold

Geoffrey

Broderick, Jr., in civil contempt for failure to comply with
this Court’s December 4, 2013 Order (ECF No. 191) directing
Defendants to pay Plaintiff $23,221.00 in attorneys’ fees by

1

December 13, 2013.

The motion was fully briefed (ECF Nos. 215,

222) and a contempt hearing was held on February 21, 2014 (ECF
No. 252).
February

In accordance with the Court’s findings during the
21,

hearing,

the

Court

held

Defendants

in

civil

contempt, finding that civil contempt was established by clear
and convincing evidence and that Defendants failed to meet their
burden of proving the asserted defense of a “present inability
to pay.”
I.

(ECF Nos. 252, 258).

Civil Contempt
Courts have broad discretion to impose punitive measures on

any party who fails to obey a discovery order.

Fed R. Civ. P.

37(b)(2)(B); Mut. Fed. Sav. & Loan Ass'n v. Richards & Assocs.,
872 F.2d 88, 92 (4th Cir. 1989); 8B Charles Alan Wright, et al.,
Federal

Practice

&

Procedure

§

2289

(3d

ed.

2010).

Rule

37(b)(2)(A)(vii) provides that courts may “treat[] as contempt
of court the failure to obey an order except an order to submit
to

a

physical

or

mental

examination.”

Further,

contempt

sanctions may be civil or criminal, depending on the nature of
the sanctions.

Buffington v. Baltimore County, 913 F.2d 113,

133 (4th Cir. 1990).
When the nature of the relief and the purpose for
which the contempt sanction is imposed is remedial and
intended to coerce the contemnor into compliance with
court orders or to compensate the complainant for
losses sustained, the contempt is civil; if, on the
other hand, the relief seeks to vindicate the
2

authority of the court by punishing the contemnor and
deterring future litigants’ misconduct, the contempt
is criminal
Id.

To hold a party in civil contempt, a court must find that

four

elements

have

been

established

by

clear

and

convincing

evidence:
(1) the existence of a valid decree of which the
alleged
contemnor
had
actual
or
constructive
knowledge; (2) that the decree was in the movant’s
‘favor’; (3) that the alleged contemnor violated the
terms of the decree, and had knowledge (at least
constructive knowledge) of such violations; and (4)
that [the] movant suffered harm as a result.
Ashcraft v. Conoco, Inc., 218 F.3d 288, 301 (4th Cir. 2000).
Here, Defendants conceded the first three elements required
for a finding of civil contempt.
disputed,
result

however,

of

that

Defendants’

pursuant

to

argument

this

was

Plaintiff
failure

Court’s

readily

(ECF No. 215, 4).

to

December

disposed

of

suffered
pay
4,
by

any

the

“harm”

sanction

Order.
the

Defendants

as

a

imposed

(Id.).

Court,

as

the

This
very

purpose of the monetary sanction in question was to reimburse
Plaintiff

for

expenses

discovery

abuses.

As

unfairly
such,

incurred

the

Court

due
found

to

Defendants’

the

elements

required for a finding of civil contempt established by clear
and convincing evidence.
Defendants’ only available defense to a finding of civil
contempt was to assert a “present inability to pay” the fine in
3

question.

A

party

facing

sanctions

for

civil

contempt

may

assert the defense of “a present inability to comply with the
order in question.”

U.S. v. Rylander, 460 U.S. 752, 757 (1983)

(citations omitted) (emphasis in original).

A court shall not

be blind to evidence that compliance with the court’s order is
now factually impossible.

Id.

In such an instance, “neither

the moving party nor the court has any reason to proceed with
the civil contempt action.”

Id.

It is well settled, however,

that in raising this defense, it is the defendant who bears the
burden of production.

Id.

Thus, in order to purge himself of

civil contempt, a defendant must affirmatively produce evidence
showing

a

question.
2000).
unsustained

present

inability

to

comply

with

the

order

in

See U.S. v. Butler, 211 F.3d 826, 831 (4th Cir.
“Conclusory
by

assertions

supporting

satisfy this burden.”

of

documentation,

financial
are

inability,

insufficient

to

S.E.C. v. SBM Inv. Certificates, Inc.,

No. 1:06-cv-0866-DKC, 2012 WL 706999, *11 (D. Md. Mar. 2, 2012)
(citations omitted).

“Rather, the companies must show that they

acted in good faith and took all reasonable efforts to comply
with the court’s order.”

Id.

Further, inability to comply is

only a “complete defense” if the party is unable to comply in
any

manner

with

a

court’s

order.

“[O]therwise,

in

order

to

demonstrate that they have undertaken reasonable and good faith
efforts to comply, [] the party must pay to the extent that
4

[its] finances would allow.”

Id. (citing Loftus v. Se. Pa.

Transp. Auth, 8 F. Supp.2d 464, 468 (E.D. Pa. 1998), aff’d, 187
F.3d 626 (3rd Cir. 1999); SEC v. Musella, 818 F. Supp. 600, 602
(S.D.N.Y 1993)(“When a party is absolutely unable to comply due
to poverty or insolvency, inability to comply is a complete
defense. Otherwise, the party must pay what [it] can.”)).
Here, Defendants raised the defense of a “present inability
to pay” both in briefing and at the contempt hearing.
215,

5-8).

motion

for

Defendants’
contempt

was

brief

in

opposition

accompanied

by

the

to

(ECF No.

Plaintiff’s

affidavit

of

R.

Geoffrey Broderick, on behalf of himself and The Resolution Law
Group,

P.C.

(“RLG”),

wherein

Mr.

Broderick

attested

current financial condition of himself and RLG.
1).

to

the

(ECF No. 215-

However, the submission of an affidavit, unsupported by

specific credible facts or supporting documentation, does not
meet the burden of establishing a present inability to comply.
See

Butler,

211

F.3d

at

833

(wherein

Butler

“submit[ed]

an

affidavit attesting to his present economic status and inability
to

pay

the

$350,000,”

yet,

“to

purge

himself

of

contempt,

[Butler] had to produce evidence of his inability to comply with
the turnover order. His submission of an affidavit did not meet
that burden; his testimony did.”); also Rylander, 460 U.S. at
758

(finding

uncrossexamined

the

defendant’s

testimony

were
5

ex

parte

properly

affidavit

disregarded

by

and
the

District Court).
the

February

likewise

As such, Mr. Broderick chose to testify during

21,

failed

to

contempt

hearing;

satisfy

however,

Defendants’

“present inability to pay.”

burden

his

testimony

of

proving

a

Specifically, Mr. Broderick could

not testify to specific amounts of funds available to himself or
RLG

nor

did

supporting
poor

Defendants

his

affidavit

financial

provide
and

straits.

any

financial

testimony
For

regarding

example,

no

statements or account records were provided.
Mr.

Broderick’s

testimony

nor

documentation

Defendants’

Defendants’

official

bank

Further, neither
briefing

suggested

that Defendants’ were unable to comply in any manner with the
Court’s

order.

In

fact,

Mr.

Broderick’s

testimony

and

Defendants’ briefing proffered that, on December 12, 2013 (the
day before payment was due), Defendants inquired to Plaintiff
about establishing a payment plan.

(ECF No. 215, 4-5).

This

contradicts Defendants’ “present inability to pay” defense and
indicates that Defendants could have complied with the Court’s
order to the extent their finances would allow, yet, Defendants
paid nothing.
Mr.

Broderick

See SBM Inv. Certificates, 2012 WL 706999 at *11.
similarly

could

not

explain

what

“reasonable

efforts” were taken to avoid violating the Court’s order.

In

particular, Mr. Broderick’s testimony was extremely general and
it was unclear to the Court what steps, if any, were actually
taken by Defendants to raise or seek funds prior to violating
6

the December 4, Order. Further, and most telling, Plaintiff’s
cross

examination

of

Mr.

Broderick

revealed

bank

records

demonstrating that Defendants received client fees in excess of
$2.6 million dollars between 2011 and 2013.

Defendants made no

accounting of this enormous sum of money; yet, Mr. Broderick
testified that Defendants could not pay the substantially lesser
sum of $23,221.00.
Having considered the evidence introduced the parties, in
particular the highly probative and uncontroverted evidence that
Defendants received in excess of $2.6 million dollars in fees
between

2011

and

2013,

the

Court

concluded

that

Defendants

failed satisfy their burden of proving the defense of a “present
inability

to

pay.”

As

such,

Defendants

failed

to

purge

themselves of civil contempt.
Upon

a

finding

of

civil

contempt,

the

court

has

inherent authority to impose fines or prison sentences.1

the
See

Victor Stanley, Inc. v. Creative Pipe, Inc., 269 F.R.D. 497, 537
(D.

Md.

Cranch)

2010)
32,

(citing

34,

3

United

L.Ed.

259

States
(1812)).

v.

Hudson,
As

11

indicated

U.S.

(7

in

the

February 21, contempt hearing, the Court ordered briefing from
the parties regarding the appropriate remedy for the contempt of

1

In order for a sentence of imprisonment to qualify as civil contempt, the
sentence must be “remedial,” meaning the defendant must stand committed
unless and until he performs the affirmative act required by the court’s
order; a sentence of imprisonment for a definite period is “punitive,” and
thus is criminal contempt. Hicks v. Feiock, 485 U.S. 624, 632 (1988).

7

Defendants.

(ECF No. 233).

The parties supplied the ordered

briefing (ECF Nos. 239, 247) and on April 9, 2014, the Court
held

a

hearing

on

the

appropriate

remedy

for

Defendants’

contempt, as well as Plaintiff’s pending motion for sanctions
(ECF No. 238).

(ECF No. 253).

On April 15, 2014, Defendants filed with the Court their
status

report

indicating

regarding

that

discovery

Defendants

sanctions

tendered

to

(ECF

No.

Plaintiff’s

255),
counsel

Mastercard payments totaling $23,781.95, representing payment in
full of the ordered sanction, plus the credit card processing
fee.

On April 22, 2014, Defendants filed their motion to purge

contempt (ECF No. 256), which included evidence of Plaintiff’s
receipt of the funds tendered by Defendants.

II.

Motion to Purge Civil Contempt
As

explained

supra,

contempt

sanctions

may

be

criminal, depending on the nature of the sanctions.
913 F.2d at 133.

civil

or

Buffington,

A sanction crafted as “remedial and intended

to coerce the contemnor into compliance with court orders or to
compensate the complainant for losses sustained” is civil.

Id.

On

the

the

other

hand,

relief

which

“seeks

to

vindicate

authority of the court by punishing the contemnor and deterring
future litigants’ misconduct” is a criminal contempt sanction.
Upon

a

finding

of

civil

contempt,

8

such

as

the

contempt

of

Defendants in this case, the Court has the inherent authority to
impose

sanctions,

including

fines

or

prison

sentences.

See

Victor Stanley, 269 F.R.D. at 537 (citations omitted).
Because civil contempt is a remedial remedy that by nature
is intended to coerce the contemnor into compliance with court
orders, the contemnor may purge his or her contempt through the
affirmative act required by the court’s order.
at 631-32; Buffington, 913 F.2d at 133-34.

Hicks, 485 U.S.

A sanction imposed

following compliance would be punitive, and thus, a remedy for
criminal contempt.
$23,221.00
Plaintiff’s

(plus

Here, Defendants have tendered payment of
$560.95

counsel,

in

credit

effectively

card

taking

processing
the

fees)

affirmative

to
act

required by the Court’s December 4, 2013, Order (ECF No. 191),
the source of Defendants’ civil contempt.

As such, the Court

orders that Defendants have purged their contempt.

III.

Conclusion
In

accordance

with

the

foregoing,

Defendants’

motion

to

purge civil contempt (ECF No. 256) is GRANTED.

Date: __4/28/2014__

_______________/s/______________
Susan K. Gauvey
United States Magistrate Judge

9