LAMBERT v. THE GIFT DEVELOPMENT GROUP, LLC, ET AL.
Filing
24
MEMORANDUM ORDER signed by CHIEF JUDGE THOMAS D. SCHROEDER on 1/11/2019, regarding (Doc. 15 ) MOTION for Order to Show Cause Why Defendants Should Not Be Held In Contempt. The parties shall appear before the court on February 28, 2019, at 2:00 p.m. in Courtroom #2, 251 North Main Street, Winston-Salem, North Carolina. Defendants are warned that failure to appear may result the issuance of an order for their arrest. FURTHER that a copy of this Order shal l be served on each Defendant at the addresses listed in CM/ECF. If personal delivery cannot immediately be accomplished, Plaintiff shall affix a copy of this Order to the front door of the residence of Tonya Taylor, 27 Meadows Edge Drive, Chapel Hi ll, N.C. 27516, and shall promptly file an affidavit of service. FURTHER that the court will consider requests by Defendants for court appointed counsel in connection with the show cause hearing if they file with the Clerk of Court a completed sworn and notarized affidavit in the form attached hereto no later than January 28, 2019, at 5:00 p.m. (Daniel, J)
IN THE UNITED STATES DISTRICT COURT
FOR THE MIDDLE DISTRICT OF NORTH CAROLINA
CHRISTOPHER K. LAMBERT,
)
)
Plaintiff,
)
)
vs.
)
)
THE GIFT DEVELOPMENT GROUP, LLC; )
TONYA R. TAYLOR, in her capacity )
as Manager of THE GIFT
)
DEVELOPMENT GROUP, LLC,
)
)
Defendants.
)
1:18-CV-00215
MEMORANDUM ORDER
This
case
is
before
the
court
on
motion
of
Plaintiff
Christopher Lambert for an order to show cause why Defendants The
Gift Development Group, LLC and Tonya R. Taylor should not be held
in contempt of court for failure to comply with the court’s
Stipulated Order and Judgment approving the settlement agreement
entered into by the parties.
I.
(Doc. 15.)
BACKGROUND
Plaintiff, a former employee of Defendants, brought this
action for unpaid wages pursuant to the Fair Labor Standards Act,
29 U.S.C. § 216(b) and the North Carolina Wage and Hour Act, N.C.
Gen. Stat. §§ 95-25.1 et seq.
(Doc. 1 at 1.)
On May 23, 2018,
the parties moved jointly for approval of a Settlement Agreement
and Release that resolved all pending claims and which provided
that Defendants make a lump sum payment of $7,500.00 to Plaintiff
in “full and final settlement of all claims.”
(Doc. 9 at 4.)
On
May 25, 2018, the court entered a Stipulated Order and Judgment
Approving Settlement Agreement.
(Doc. 10.)
At the parties’ joint
request, the court retained jurisdiction over the case for purposes
of enforcement of the Settlement Agreement.
(Id. at 3.)
On July 23, 2018, Plaintiff moved to enforce the Settlement
Agreement and for attorneys’ fees, indicating that Defendants had
failed to make payment as required by the Settlement Agreement
incorporated in the court’s Stipulated Order and Judgment.
11, 12.)
(Docs.
Defendants did not respond to the motion.
Accordingly, on October 3, 2018, the court entered an Order
requiring
specific
performance
of
the
Settlement
Agreement
incorporated into the court’s Stipulated Order and Judgment no
later than October 13, 2018.
(Doc. 13.)
Plaintiff’s motion for
an award of attorneys’ fees was denied without prejudice, pending
a showing of bad faith.
(Id.)
On October 16, 2018, Plaintiff moved for an order to show
cause why Defendants should not be held in contempt.
(Doc. 15.)
Plaintiff represented that Defendants had failed to comply with
the court’s October 3, 2018 Order.
Thereafter, on October 17,
2018, the Magistrate Judge entered an oral order granting a motion
by Defendants’ attorney to withdraw for failure to be paid and
insufficient communication with Defendants.
2
On November 20, 2018, the court entered an order setting a
show cause hearing for December 5, 2018, at 9:30 a.m. in WinstonSalem.
(Doc. 17.)
The Order commanded Defendants to appear to
show cause why they should not be held in contempt of court and
why they should not pay pre- and post-judgment interest, civil
contempt damages, and attorney fees, as well as the underlying
judgment amount.
Upon motion of Defendant Tonya R. Taylor (Doc.
19), and over the objection of Plaintiff (Doc. 20), the court reset
the show cause hearing to January 2, 2019, at 2:00 p.m. in WinstonSalem, to accommodate Defendant Taylor’s stated work schedule.
(Doc. 21.)
The court warned Taylor that while she could appear
pro se on her own behalf, she could not likewise represent codefendant The Gift Development Group, LLC under Local Rule 11.1(a).
(Id.)
On January 2, 2019, at 2:00 p.m., this case was called for
hearing.
Plaintiff was present with counsel.
appeared, nor did anyone appear on their behalf.
Neither Defendant
The court waited
for 20 minutes to allow Defendants an opportunity to appear.
At
approximately 2:20 p.m., the court proceeded with the hearing.
At
about that time, the Deputy Clerk received a voicemail from
Defendant Taylor.
The court recessed to listen to the voicemail.
Defendant Taylor stated in sum that she had called the Clerk’s
Office and was advised she should speak to the court’s Deputy
3
Clerk; Taylor requested that the Deputy Clerk return her call.
At
no time in the voicemail did Defendant Taylor indicate that she
was unavailable for the hearing or provide any excuse for not
attending.
As
the
factual
recitation
demonstrates,
Defendants
have
disregarded their obligations under the Settlement Agreement that
they urged the court to approve in the Stipulated Order and
Judgment, as well as all subsequent orders of the court to perform
their obligations or to appear for hearings.
II.
ANALYSIS
Plaintiff now requests that Defendants be held in contempt,
and that civil sanctions be imposed.
requests
post-judgment
interest
in
Plaintiff specifically
the
amount
of
$106.80,
attorneys’ fees in the amount of $5,725.00, and reimbursement of
expenses in the amount of $13.00. These sanctions total $5,844.80,
on top of the original $7,500 owed to Plaintiff by Defendants under
the Settlement Agreement.
At the January 2 hearing, Plaintiff
requested that the court do “whatever is in [the court’s] power to
enforce” its prior orders, including jailing Defendant Taylor
until she complies. In support of these requests, Plaintiff argues
that the court has inherent power to sanction parties for failing
to comply with its orders, and that he has made a sufficient
showing that Defendants should be found in contempt.
4
“[C]ourts have inherent power to enforce compliance with
their lawful orders through civil contempt.”
States, 384 U.S. 364, 370 (1966).
Shillitani v. United
“A court may impose sanctions
for civil contempt ‘to coerce obedience to a court order or to
compensate the complainant for losses sustained as a result of the
contumacy.’”
Cromer v. Kraft Foods N. Am., 390 F.3d 812, 821 (4th
Cir. 2004) (quoting In re Gen. Motors Corp., 61 F.3d 256, 258 (4th
Cir. 1995)).
“To establish civil contempt, each of the following elements
must be shown 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 by its
conduct 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) (omissions and alteration
in original) (quoting Colonial Williamsburg Found. v. Kittinger
Co., 792 F. Supp. 1397, 1405-06 (E.D. Va. 1992), aff’d, 38 F.3d
133 (4th Cir. 1994)).
Once this showing is made, the burden shifts
to the alleged contemnor to justify non-compliance.
v. Rylander, 460 U.S. 752, 757 (1983).
United States
“Recognized defenses to
civil contempt include: (1) a good-faith attempt to comply with
5
the court’s order; (2) substantial compliance; and (3) an inability
to comply.” U.S. Commodity Futures Trading Comm’n v. Capitalstreet
Fin., LLC, 3:09cv387-RJC-DCK, 2010 WL 2131852, at *2 (W.D.N.C. May
25, 2010) (citing Consol. Coal Co. v. United Mine Workers of Am.,
683 F.2d 827, 832 (4th Cir. 1982)).
“The appropriate remedy for civil contempt is within the
Court’s broad discretion ‘based on the nature of the harm and the
probable effect of alternative sanctions.’”
Cree, Inc. v. Bain,
No. 1:15-CV-547, 2015 WL 12911462, at *3 (M.D.N.C. July 20, 2015)
(quoting Colonial Williamsburg Found., 792 F. Supp. at 1407).
The
remedy in a civil contempt proceeding must be tailored to either
coerce the contemnor into compliance with the court’s order and/or
compensate
compliance.1
the
complainant
for
losses
caused
by
past
non-
Id. (quoting Colonial Williamsburg Found., 792 F.
Supp. at 1407).
“The Court may order incarceration pending
compliance, and there may be financial consequences such as a fine
1
The Fourth Circuit has described the essential difference between civil
contempt and criminal contempt as follows:
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 authority of the court by punishing the contemnor and
deterring future litigants’ misconduct, the contempt is
criminal.
Buffington v. Baltimore Cty., 913 F.2d 113, 133 (4th Cir. 1990).
6
and attorneys’ fees.”
Id.
The court need not hold an evidentiary
hearing before granting a civil contempt motion.
Id.
However, if
the alleged contemnor fails to appear for the hearing, the court
may issue an order for her arrest to coerce an appearance or may
rule on the motion in her absence, and — if the motion for contempt
is granted and incarceration is ordered — issue an order for her
arrest until or unless she complies with the order.
Id.
In the present case, the court has previously concluded (and
here
again
reiterates)
that
clear
and
convincing
evidence
demonstrates that plaintiff has set forth a prima facia showing
for
entitlement
standard.
Judgment
to
relief
under
the
general
civil
contempt
In other words, there is a valid Stipulated Order and
adopting
the
Settlement
Agreement
that
Defendants
voluntarily entered into and indeed solicited the court’s approval
of; the Stipulated Order and Judgment is in favor of Plaintiff;
neither Defendant has made any payment under the Stipulated Order
and Judgment, and the time for doing so has passed; and Plaintiff
has suffered harm insofar as he has not been paid.
On this record,
because neither Defendant has appeared or provided any reason for
noncompliance with the Stipulated Order and Judgment, there is no
evidence of a justification for non-payment.
Defendant Taylor has
demonstrated an indifference to her obligations and appears to
have willfully disregarded orders of this court.
7
She has failed
to take seriously her obligations under the Settlement Agreement
and the Stipulated Order and Judgment.
Neither Plaintiff, nor the
court, need tolerate such disrespect for the integrity of the
judicial process.
Nevertheless, the court’s independent research shows that
there remains some question whether a finding of contempt (with
sanctions) is appropriate at this stage.
Monetary judgments are
normally “enforced by a writ of execution, unless the court directs
otherwise.” Fed. R. Civ. P. 69(a)(1). Although the Fourth Circuit
has not ruled on the propriety of contempt proceedings as a
mechanism for enforcing monetary judgments,2 many courts have found
that “[t]he ‘otherwise’ clause [in Federal Rule of Civil Procedure
69(a)(1)]
is
narrowly
construed”
and
“does
not
authorize
enforcement of a civil money judgment by methods other than a writ
2
In Clark v. Allen, Nos. 95-2487, 96-1116, 96-1276, 1998 WL 110160 (4th
Cir. Mar. 13, 1998) (unpublished table decision), the Fourth Circuit
approved a district court’s use of orders requiring that Defendants “turn
over property in their possession” to satisfy a prior monetary judgment.
Id. at *7.
Unpublished decisions of the Fourth Circuit “have no
precedential value, and they are entitled only to the weight they
generate by the persuasiveness of their reasoning.”
Collins v. Pond
Creek Mining Co., 468 F.3d 213, 219 (4th Cir. 2006) (internal quotation
marks omitted). The Fourth Circuit in Allen based its decision on the
fact that the district court’s orders “substantially complied” with
normal “execution procedures” in the state in which the district court
sat. Allen, 1998 WL 110160, at *7; see also Fed. R. Civ. P. 69(a)(1)
(“The procedure on execution . . . must accord with the procedure of the
state where the court is located . . . .”). Furthermore, the district
court orders underlying Allen were not issued pursuant to contempt
proceedings. See Clark v. Wilbur, 913 F. Supp. 463, 464–65 (S.D.W. Va.
1996).
Finally, the district court made an express finding that
“execution is inadequate to enforce the judgment under the circumstances
of this case.” Id. at 466 n.4.
8
of execution” — such as “by resort to the contempt power” — unless
the
movant
shows
“extraordinary
circumstances
departure from the general rule.”
which
warrant
Aetna Cas. & Sur. Co. v.
Markarian, 114 F.3d 346, 349 & n.4 (1st Cir. 1997); accord Combs
v. Ryan’s Coal Co., Inc., 785 F.2d 970, 980 (11th Cir. 1986)
(“[W]hen a party fails to satisfy a court-imposed money judgment
the appropriate remedy is a writ of execution, not a finding of
contempt.”); Shuffler v. Heritage Bank, 720 F.2d 1141, 1148 (9th
Cir. 1983) (finding that, although Rule 69(a)(1) “seemingly leaves
open the possibility of securing payment of a money judgment
through the imposition of a contempt sanction,” such contempt
sanctions are not appropriate absent “exceptional circumstances”);
Newport News Holdings Corp. v. Virtual City Vision, Inc., No.
4:08cv19,
2010
WL
11566420,
at
*2
(E.D.
Va.
May
28,
2010).
Examples of the “extraordinary circumstances” courts have found
sufficient to make contempt sanctions appropriate in the monetary
judgment context include “where the judgment is against a state,
which refuses to appropriate funds through the normal process
provided by state law,” Spain v. Mountanos, 690 F.2d 742, 745 (9th
Cir. 1982) or where contempt sanctions are necessary “to enforce
the public policies embodied in [a] statutory scheme,” Markarian,
114 F.3d at 349 n.4 — essentially, circumstances in which a writ
of execution would be somehow “inadequate,” Clark v. Wilbur, 913
9
F. Supp. 463, 466 n.4 (S.D.W. Va. 1996), aff’d sub nom. Clark v.
Allen, Nos. 95-2487, 96-1116, 96-1276, 1998 WL 110160 (4th Cir.
Mar. 13, 1998) (unpublished table decision).3
When questioned by the court at the show cause hearing,
Plaintiff’s counsel represented that they “ha[d] not tried to
execute on the judgment yet, but that is something that we can and
intend to do.” Although Plaintiff’s briefing catalogues the myriad
opportunities he has given Defendants to make the required payment
under the Settlement Agreement, as well as Defendants’ repeated
evasion of their responsibility to pay, Plaintiff has not shown
why resort to a writ of execution would be inadequate in this case.
As a result, the court will refrain from making a contempt finding
or impose sanctions, and will instead schedule an additional
hearing
for
the
consideration
of
whether
“exceptional
circumstances” exist in this case to enforce the monetary judgment
via
a
contempt
order.
If
the
court
finds
such
exceptional
circumstances, Plaintiff need make no further showing, as the court
already found at the show cause hearing that the prima facie
elements of contempt have been shown.
3
Instead, the burden will be
In general, “difficulties in enforcing the judgment due to the location
of the assets and the uncooperativeness of the judgment debtor are not
the types of extraordinary circumstances which warrant departure from
the general rule that money judgments are enforced by means of writs of
execution rather than by resort to the contempt power of the courts.”
Markarian, 114 F.3d at 349 n.4.
10
on Defendants to make out a defense to contempt. See Capitalstreet
Fin., LLC, 2010 WL 2131852, at *2 (“Recognized defenses to civil
contempt include: (1) a good-faith attempt to comply with the
court’s order; (2) substantial compliance; and (3) an inability to
comply.”).
If the court makes a contempt finding, the court will
consider any sanction calculated to “coerce the contemnor into
compliance with court orders or to compensate the complainant for
losses sustained,” Buffington v. Baltimore Cty., 913 F.2d 113, 133
(4th Cir. 1990),
including post-judgment interest, attorneys’
fees,4 and an order that Defendant Taylor be taken into custody
until she complies with the court’s Stipulated Order and Judgment.
Because incarceration is a possible civil contempt sanction,
and because the court will consider the propriety of this sanction
4
“[A] court may assess attorneys’ fees as part of the fine to be levied
on the contemnor for the ‘willful disobedience’ of a court order.” Omega
World Travel, Inc. v. Omega Travel and Shipping Agencies, Inc., Nos. 893268, 890-3282, 1990 WL 74305, at *4 (4th Cir. May 10, 1990) (unpublished
table decision) (quoting Alyeska Pipeline Serv. Co. v. Wilderness Soc’y,
421 U.S. 240, 258 (1975) and Fleischmann Distilling Corp. v. Maier
Brewing Co., 386 U.S. 714, 718 (1967)).
“[I]n order to satisfy the
‘willful disobedience’ standard,” the contemnor’s conduct “must rise to
the level of obstinacy, obduracy or recalcitrance . . . .” Id. Mere
“[n]eglect and carelessness are insufficient to demonstrate obstinance
and recalcitrance.” Summerville v. Local 77, No. 1:06cv00719, 2008 WL
3983118, at *6 (M.D.N.C. Aug. 26, 2008) (internal quotation marks
omitted).
Thus, although willfulness is not an element of civil
contempt, United States v. Westbrooks, 780 F.3d 593, 596 n.3 (4th Cir.
2015), Plaintiff must show willfulness to recover attorneys’ fees, and
therefore should be prepared to address willfulness at the hearing.
Furthermore, as the court noted in a prior order (Doc. 13 at 3), the
Settlement Agreement contains a provision releasing Defendants from any
claims for attorneys’ fees (Doc. 9-1 at 3). Plaintiff should be prepared
to address the effect, if any, of this provision on his request for
attorneys’ fees.
11
at
the
upcoming
hearing,
the
court
strongly
suggests
that
Defendants — especially Defendant Taylor — retain legal counsel.
As in all civil proceedings, Defendants have the right to hire an
attorney to represent them in connection with these proceedings.
Insofar
as
the
court
is
considering
the
possibility
of
incarceration to enforce compliance, and while there is no right
to a court-appointed counsel generally in a civil case, Defendant
Taylor may have a right to appointed counsel for the limited
purpose of defending the show cause order to the extent of the
possible incarceration remedy.
(2011).
See Turner v. Rogers, 564 U.S. 431
If Defendant Taylor contends that she is indigent and
otherwise entitled to court appointed counsel for this limited
purpose, then she shall complete the attached affidavit in full,
sign it under oath in front of a notary public, and file it with
the Clerk of Court no later than January 28, 2019, at 5:00 p.m.
III. CONCLUSION
For all these reasons, therefore,
IT IS ORDERED that the parties shall appear before the court
on February 28, 2019, at 2:00 p.m. in Courtroom #2, 251 North Main
Street, Winston-Salem, North Carolina.
consider at this hearing are as follows:
12
The issues the court will
1.
Whether Plaintiff has demonstrated that in this case a
contempt finding — as opposed to a writ of execution —
is the appropriate remedy for Defendants’ noncompliance.
2.
If a contempt finding is appropriate, whether Defendants
can show cause that they should not be held in contempt.
3.
If Defendants cannot show cause, what sanctions the
court should impose to compensate Plaintiff for losses
sustained due to Defendants’ noncompliance and/or coerce
Defendants into complying, including whether Defendant
Taylor should be held in custody pending compliance.
This issue also includes whether Defendants’ conduct
rises to the level of “willful disobedience” sufficient
to make an award of attorneys’ fees appropriate, as well
as whether the Settlement Agreement bars an award of
attorneys’ fees.
Defendants are warned that failure
to appear may result
the
issuance of an order for their arrest.
IT IS FURTHER ORDERED that a copy of this Order shall be
served on each Defendant at the addresses listed in CM/ECF.
If
personal delivery cannot immediately be accomplished, Plaintiff
shall affix a copy of this Order to the front door of the residence
of Tonya Taylor, 27 Meadows Edge Drive, Chapel Hill, N.C. 27516,
and shall promptly file an affidavit of service.
13
IT IS FURTHER ORDERED that the court will consider requests
by Defendants for court appointed counsel in connection with the
show cause hearing if they file with the Clerk of Court a completed
sworn and notarized affidavit in the form attached hereto no later
than January 28, 2019, at 5:00 p.m.
/s/
Thomas D. Schroeder
United States District Judge
January 11, 2019
14
FINANCIAL AFFIDAVIT
CJA 23
(Rev. 11/11)
IN SUPPORT OF REQUEST FOR ATTORNEY, EXPERT, OR OTHER SERVICES WITHOUT PAYMENT OF FEE
IN THE UNITED STATES
’ DISTRICT COURT
’ COURT OF APPEALS
’ OTHER (Specify below)
LOCATION NUMBER
IN THE CASE OF
FOR
v.
AT
PERSON REPRESENTED (Show your full name)
1
2
3
CHARGE/OFFENSE (describe if applicable & check boxÿ)
4
5
5
7
8
9
’ Felony
’ Misdemeanor
’
’
’
’
’
’
’
’
’
Defendant - Adult
Defendant - Juvenile
Appellant
Probation Violator
Supervised Release Violator
Habeas Petitioner
2255 Petitioner
Material Witness
Other (Specify)
DOCKET NUMBERS
Magistrate Judge
District Court
Court of Appeals
ANSWERS TO QUESTIONS REGARDING ABILITY TO PAY
Are you now employed?
’ Yes
’ No
’ Self-Employed
Name and address of employer:
IF YES, how much do you
earn per month? $
IF NO, give month and year of last employment?
How much did you earn per month? $
EMPLOYMENT
If married, is your spouse employed?
’ Yes
’ No
If you are a minor under age 21,
what is the approximate monthly income
of your parent(s) or guardian(s)? $
IF YES, how much does your
spouse earn per month? $
INCOME
&
ASSETS
Have you received within the past 12 months any income from a business, profession or other form of self-employment, or in the
form of rent payments, interest, dividends, retirement or annuity payments, or other sources?
’ Yes ’ No
OTHER
INCOME
CASH
PROPERTY
RECEIVED
IF YES, give the amount
received and identify the
sources
Do you have any cash on hand or money in savings or checking accounts?
’ Yes ’ No IF YES, total amount? $
Do you own any real estate, stocks, bonds, notes, automobiles, or other valuable property (excluding ordinary household furnishings
and clothing)? ’ Yes ’ No
VALUE
DESCRIPTION
IF YES, give value and $
description for each $
$
$
MARITAL STATUS
Single
Married
Widowed
Separated or Divorced
DEPENDENTS
OBLIGATIONS
&
DEBTS
SOURCES
$
$
$
DEBTS &
MONTHLY BILLS
(Rent, utilities, loans,
charge accounts, etc.)
List persons you actually support and your relationship to them
Total
No. of
Dependents
DESCRIPTION
MONTHLY
PAYMENT
TOTAL DEBT
$
$
$
$
$
$
$
$
I certify under penalty of perjury that the foregoing is true and correct.
SIGNATURE OF DEFENDANT
Date
(OR PERSON REPRESENTED)
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