Federal Insurance Company v. CAC of NY, Inc. et al

Filing 25

CERTIFICATION of Facts Constituting Contempt. For the reasons set forth in the attached Certification, the Court respectfully recommends that Cutlass Industries, Inc. be directed to appear before the Honorable Denis R. Hurley on a date certain to be set by Judge Hurley to show cause why it should not be found in contempt of court for failing to comply with Plaintiffs information subpoena and with the September 4, 2015 Order of this Court. Entered by Magistrate Judge Steven I. Locke on 4/18/2016. (Walsh, Kenneth)

UNITED STATES DISTRICT COURT
EASTERN DISTRICT OF NEW YORK
------------------------------------------------------------------------X
FEDERAL INSURANCE COMPANY,
Plaintiff,
-againstCAC OF N.Y., INC. and CUTLASS INDUSTRIES,
INC.,

CERTIFICATION OF
CONTEMPT
14-CV-4132 (DRH)(SIL)

Defendants.
------------------------------------------------------------------------X
LOCKE, Magistrate Judge:
Presently before the Court is Plaintiff Federal Insurance Company’s
(“Plaintiff”) unopposed motion to hold Defendant Cutlass Industries, Inc. (“Cutlass”)
in contempt of court for failure to comply with post-judgment information subpoenas
and a September 4, 2015 Order of this Court. See Docket Entry (“DE”) [23]. For the
reasons set forth herein, the Court respectfully recommends that Cutlass be directed
to appear before the Honorable Denis R. Hurley on a date certain to be set by Judge
Hurley, to show cause why it should not be adjudged in contempt of the post-judgment
information subpoenas propounded by Plaintiff and this Court’s September 4, 2015
Order compelling Cutlass to respond to Plaintiff’s discovery demands.
Pursuant to the Federal Magistrates Act, 28 U.S.C. § 636(e), federal magistrate
judges are authorized to exercise contempt authority in certain limited
circumstances, including civil contempt authority in misdemeanor cases and cases
where the magistrate judge presides with the consent of the parties. 28 U.S.C. §
636(e)(3), (4). In all other instances in which a party’s actions constitute contempt:

1

the magistrate judge shall forthwith certify the facts to a district judge
and may serve or cause to be served, upon any person whose behavior is
brought into question under this paragraph, an order requiring such
person to appear before a district judge upon a day certain to show cause
why that person should not be adjudged in contempt by reason of the
facts so certified. The district judge shall thereupon hear the evidence
as to the act or conduct complained of and, if it is such as to warrant
punishment, punish such person in the same manner and to the same
extent as for a contempt committed before a district judge.
28 U.S.C. § 636(e)(6).
In determining whether to certify facts to the district court, “the magistrate
judge’s role is ‘to determine whether the moving party can adduce sufficient evidence
to establish a prima facie case of contempt.’” Hunter TBA, Inc. v. Triple V Sales, 250
F.R.D. 116, 118 (E.D.N.Y. 2008) (quoting Church v. Steller, 35 F. Supp. 2d 215, 217
(N.D.N.Y. 1999)); see also Bowens v. Atl. Maint. Corp., 546 F. Supp. 2d 55, 71
(E.D.N.Y. 2008) (“[T]he magistrate judge functions only to certify the facts and not to
issue an order of contempt.”) (internal quotations omitted). Upon certification, the
district court “is then required to conduct a de novo hearing at which issues of fact
and credibility determinations are to be made.” Bowens, 546 F. Supp. 2d at 71.
Three essential elements must be established before a party can be held in civil
contempt: “(1) there must be an order that is clear and unambiguous; (2) the proof of
non-compliance with that order must be clear and convincing; and (3) it must be
shown that the contemnor has not been reasonably diligent and energetic in
attempting to accomplish what was ordered.” Mauro v. Countrywide Home Loans,
Inc., No. 07-CV-1268, 2009 WL 3463570, at *2 (E.D.N.Y. Oct. 21, 2009) (citing Hunter
TBA, Inc., 250 F.R.D. at 119).

To that end, “[t]he court’s order must leave no

uncertainty in the minds of those to whom it is addressed, and one must be able to
2

ascertain from the four corners of the order precisely what acts are forbidden.”
Bowens, 546 F. Supp. 2d at 64 (internal quotations omitted).
The Court’s September 4, 2015 Order clearly and unambiguously ordered
Cutlass to respond to Plaintiff’s information subpoena on or before October 4, 2015.
See DE [22] at 6. It is undisputed that Cutlass failed to comply with this Court’s
Order, and Cutlass has not proffered any evidence to demonstrate its diligence in
attempting to comply. See Affidavit of Samuel J. Thomas in Support of Plaintiff’s
Motion to Hold Cutlass Industries, Inc. in Contempt for Failure to Comply with a
Court Order (the “Thomas Aff.”), DE [23-1], ¶¶ 18-19. Accordingly, pursuant to 28
U.S.C. § 636(e), the Court certifies the following facts, which are undisputed and are
based on Plaintiff’s motion, the Court’s prior Orders, and all prior proceedings herein:
1.

On March 19, 2015, the Clerk of Court entered judgment against

Defendants CAC of N.Y., Inc. (“CAC”) and Cutlass, jointly and severally, in the
amount of $227,844.40. See DE [13].
2.

On April 9, 2015, in an effort to identify assets in satisfaction of the

judgment, Plaintiff issued business information subpoenas to CAC and Cutlass,
requesting financial and asset information regarding their property, income, or any
other means relevant to the satisfaction of judgment. See Thomas Aff. ¶¶ 7-8.
3.

Plaintiff provided proof that CAC and Cutlass’s owner and managing

agent, Lisa Romano, accepted service of the information subpoenas on April 30, 2015.
Id. at Ex. B.

3

4.

After CAC and Cutlass failed to respond to the information subpoenas,

Plaintiff filed a motion to compel responses from CAC and Cutlass on May 22, 2015.
Id. at ¶ 10. Plaintiff also sought to hold CAC and Cutlass in contempt for their failure
to respond. See DE [15].
5.

On June 24, 2015, CAC responded to the information subpoena. See

Thomas Aff. ¶ 14. Accordingly, Plaintiff withdrew its motion as it related to CAC.
See DE [19].
6.

On September 4, 2015, this Court granted in part and denied in part

Plaintiff’s motion to compel and hold Cutlass in contempt. See DE [22]. The Court
ordered Cutlass to respond to Plaintiff’s information subpoena within thirty days. Id.
at 6. The Court declined, at that time, to certify facts to the district court to initiate
further contempt proceedings. Id. A copy of this Court’s September 4, 2015 Order
was transmitted to Cutlass’s counsel of record, Donald V. Pupke, Jr., via the Court’s
Electronic Case Filing (“ECF”) system.
7.

Pursuant to the Court’s September 4, 2015 Order, Cutlass’s time to

respond to the information subpoena expired on October 4, 2015. See Thomas Aff. ¶
18.
8.

Cutlass has not responded to the information subpoena, nor has it paid

Plaintiff in satisfaction of the judgment entered against CAC and Cutlass. Id. at ¶
19.
9.

On October 14, 2015, Plaintiff filed the instant motion for contempt, in

which it seeks an Order: (i) finding Cutlass in contempt for its failure to abide by this

4

Court’s September 4, 2015 Order; (ii) issuing a warrant for the arrest of Ms. Romano;
and (iii) granting Plaintiff leave to file an application for attorneys’ fees and costs
associated with filing the instant motion. See DE [23]; see also Thomas Aff. ¶¶ 21-23.
A copy of Plaintiff’s motion was served on Cutlass’s counsel of record via the Court’s
ECF system on October 14, 2015. See DE [24].
10.

Cutlass has not opposed or otherwise responded to Plaintiff’s motion.
CONCLUSION

Based on the foregoing, the Court respectfully recommends that Cutlass be
directed to appear before the Honorable Denis R. Hurley to show cause why it should
not be found in contempt of court for failing to comply with Plaintiff’s information
subpoena and with the September 4, 2015 Order of this Court.

Dated: Central Islip, New York
April 18, 2016
s/ Steven I. Locke
STEVEN I. LOCKE
United States Magistrate Judge

5