BONOMO v. CITRA CAPITAL MANAGEMENT, LLC et al

Filing 63

OPINION. Signed by Judge William H. Walls on 8/26/2015. (nr, )

NOT FOR PUBLICATION
UNITED STATES DISTRICT COURT
DISTRICT OF NEW JERSEY

DAVID P. BONOMO,
Plaintiff,

OPINION

V.

:

Civ. No. 11-04409 (WHW) (CLW)

CITRA CAPITAL MANAGEMENT, LLC,
CITRA REAL ESTATE CAPITAL
MANAGEMENT, LLC,
CITRA/NEWWORK HEALTHCARE
CAPITAL, LLC, MICHAEL I. JANDA, and
HERBERT SALTZMAN,
Defendants.

Walls. Senior District Judge

In this case where a settlement was reached but never fulfilled, Plaintiff David Bonomo
moves to hold Defendant Herbert Saltzman in contempt for violating a Court order. Pl.’s Contempt
Mot., ECF No. 43. After conducting a hearing on July 21, 2015, the Court denies Plaintiffs
motion.
FACTUAL AND PROCEDURAL BACKGROUND

On February 26, 2014, the Court dismissed this case because it was reported to the Court
that it had been settled. Order of Dismissal, ECF No. 33. The Court
ORDERED that this action is hereby dismissed without prejudice and without
costs, subject to the right of the parties upon good cause shown within 60 days, to
reopen the action if the settlement is not consummated. The terms of the settlement
agreement are incorporated herein by reference and the Court shall retain
jurisdiction over the settlement agreement to enforce its terms.
Id.

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On April 1, 2014, Plaintiff David Bonomo flied a motion to enforce the settlement
agreement. Pl.’s Mot. to Enforce, ECF No. 34. Ronald Nagle, Mr. Bonomo’s counsel, certified
that the parties settled the case on february 11, 2014 before retired Judge John M. Boyle and that
Judge Boyle had recorded the settlement terms. Reply Cert. of Ronald Nagle

¶ 2,

ECF No. 36.

After the parties agreed to the settlement tern-is before Judge Boyle, the agreement was committed
to writing. Cert. of Ronald Nagle ¶ 2, ECF No. 34-1. On April 24, 2014, the Court ordered that the
written version of the settlement agreement submitted to the Court would become effective
between the parties in ninety days or on July 25, 2014, whichever was later. Order of Apr. 24,
2014, ECF No. 37.
On August 20, 2014, Plaintiff again moved to enforce the settlement agreement. Pl.’s
Second Mot. to Enforce, ECF No. 38. The motion was unanswered by Mr. $altzman. The Court
granted it on October 14, 2014 and ordered Mr. Saltzman to “make all payments presently due
under the settlement agreement within thirty days of the date of this Order, and continue making
all required payments thereafter.” Order of Oct. 14, 2014, ECf No. 39.
On November 19, 2014, Mr. Nagle notified the Court by letter that Mr. Saltzman had
“failed and refused to comply with the Court’s Orders.” Letter from Ronald Nagle, ECf No. 40.
The Court conducted an in-person conference with counsel for the parties on December 16, 2014.
At the hearing, counsel for Mr. Saltzman expressed that Mr. Saltzman did not intend to make any
payments to Plaintiff as required by the settlement agreement. On December 18, 2014, Mr.
Bonomo filed this motion to hold Mr. Saltzman in contempt. On January 8, 2015, Mr. Saltzman
cross-moved to vacate the Court’s earlier orders enforcing the settlement.
On March 24, 2015, the Court denied Mr. Saltzman’s cross-motion to vacate the Court’s
earlier orders enforcing the settlement. Opinion, ECF No. 47. The Court also deferred ruling on

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Mr. Bonomo’s motion to hold Mr. Saltzman in contempt, on the basis that “a district court must
find that a potential contemnor has the financial ability to make an ordered payment before
imposing civil contempt for failure to do so.” Id. at 6 (citing Camerons Hardware Inc. v.
Independence Blue Cross, 363 F. App’x 197, 201 (3d Cir. 2010)). The Court ordered Mr. Saltzman
to present documentary evidence of his financial capacity to pay the required amounts under the
settlement agreement. Id.
On April 21, 2015, Mr. Saltzman submitted evidence of his financial status to the Court.
Deci. of Herbert Saltzman, ECF No. 51. After reviewing Mr. Saltzman’s submission, the Court
ordered on June 23, 2015 that Mr. Saltzman show cause why he should not be held in contempt
for violating the Court’s October 14, 2014 order enforcing the settlement agreement and for
submitting obfuscatory evidence of his financial capacity to pay the amounts owed under the
settlement agreement. Order to Show Cause, ECF No. 54. Mr. Saltzman submitted additional
documentation of his financial status on July 14, 2015, ECF No. 55, and appeared before the Court
on July 21, 2015 for a hearing on the Court’s order to show cause. At the hearing, Mr. Saltzman
gave sworn testimony regarding his financial status and capacity to pay the amounts he owes under
the settlement agreement. The Court ordered Mr. $altzman to submit additional documentation
regarding his interests in several trusts, and Mr. Saltzman submitted the documentation on July 31,
2015. Deci. of Herbert Saltzman, ECF No. 60.
LEGAL STANDARD

A litigant’s failure to comply with a Court order to enforce a settlement agreement can be
punished by civil contempt. See Institute for Motivational Living, Inc. v. Doulos Institute for
Strategic Consulting, 110 F. App’x 283, 287 (3d Cir. 2004). To prove civil contempt, a plaintiff
must demonstrate by clear and convincing evidence: (1) that a valid order of court existed; (2) that

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the defendant had knowledge of the order; and (3) that the defendant disobeyed the order. Roe v.
Operation Rescue, 54 F.3d 133, 137 (3d Cir. 1995). An order of civil contempt becomes
impermissibly punitive “if a contemnor is unable to comply with the order.” United States v.
Harris, 582 F.3d 512, 520 (3d Cir. 2009). The Third Circuit has held that a district court must find
that a potential contemnor has the financial ability to make an ordered payment before imposing
civil contempt for failure to do so. Camerons Hardware Inc. v. Independence Blue Cross, 363 F.
App’x 197, 201 (3d Cir. 2010) (district court should have made a finding regarding contemnor’s
ability to make a required payment by analyzing financial evidence, including contemnor’s latest
tax return).
DISCUSSION

Having reviewed Mr. Saltzman’s documentary submissions as to his financial status and
having considered Mr. Saltzman’s oral testimony, the Court finds that Mr. Saltzman is financially
incapable of complying with the Court’s orders to make the payments required of him by the
settlement agreement. As such, the Court cannot hold Mr. Saltzman in civil contempt for his failure
to comply with the Court’s orders. See Camerons Hardware Inc., 363 F. App’x at 201. The Court
must deny Plaintiff’s motion for contempt.
CONCLUSION

Plaintiffs motion to hold Mr. Saltzman in contempt is denied. An appropriate order
follows.

Date: Augusta, 2015

1tllia
alls
United States Senior District Judge
.

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