United States of America v. Klosterman et al
Filing
113
ORDER granting 95 Plaintiff's Motion to Enforce the Consent Decree, as construed as a motion to reopen this case to Enforce the Consent Decree; granting 101 Plaintiff's Motion to Substitute Substitute John Klosterman for Defendant Sus an Klosterman; adopting 103 Report and Recommendations except as to those portions regarding Defendants' remaining payment of monetary damages; the Court enters a finding of CIVIL CONTEMPT against both Defendant John Klosterman individually and as substitute for Susan Klosterman and includes provisions listed in the Order. Signed by Judge Michael R. Barrett on 3/21/2022. (kkz)(This document has been sent by regular mail to the party(ies) listed in the NEF that did not receive electronic notification.)
UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
United States of America,
Plaintiff,
Case. No. 1:18cv194
and
Housing Opportunities Made
Equal, Inc.,
Judge Michael R. Barrett
Plaintiff-Intervenor,
v.
John Klosterman, et al.,
Defendants.
ORDER ON REPORT AND RECOMMENDATION &
CONTEMPT ORDER
This matter is before the Court on the Magistrate Judge's Report and
Recommendation ("R&R"). (Doc. 103). The R&R recommends that the Court grant both
the Government's Motion to Substitute Defendant John Klosterman for Defendant Susan
Klosterman and Motion to Enforce the Consent Decree, and also recommends entering a
finding of civil contempt against both Defendant John Klosterman individually and as
substitute for Susan Klosterman. (Id.) Pro se Defendant John Klosterman filed objections
(Doc. 108), and the Government filed a response to the objections (Doc. 110).
The Magistrate Judge completed a comprehensive review of the record, the pending
motions, and the parties' arguments regarding those motions, and the same will not, and
need not, be repeated herein. (Doc. 103). It is well-settled that signatories to any written
contract are to read and understand the terms of any contract that they ultimately sign, and
that such signatories must subsequently act accordingly. Defendant John Klosterman's
alleged failure to read and understand the Consent Decree in this matter before he
ultimately signed the Consent Decree is no one's fault but his own. Defendant John
Klosterman's on-going failure to act in accordance with the Consent Decree is also no one's
fault but his own. His litany of excuses—including blaming his prior counsel in this matter,
his prior counsel in eviction matters, the City of Cincinnati, the Federal Government, his
late spouse, COVID-19, the small number of properties he admits to currently owning and
directly and indirectly managing, billing issues, his state court civil litigation, his state court
criminal charges, his house arrest, his subsequent criminal conviction, and his
incarceration for his failure to abide by the 9 1 specific sections of the Consent Decree
highlighted by the Government in its Motion to Enforce and Magistrate Judge in the pending
R&R—is unavailing. See, e.g., (Docs. 99, 108). And his dispute of the factual allegations
underlying this lawsuit (Doc. 108 PageID 5413-15) is misplaced, as he signed the Consent
Decree, and it became effective immediately upon the Court's entry. The time for resolving
factual disputes has long passed. Defendant John Klosterman must abide by the entire
Consent Decree that he signed for the now-extended period that the Consent Decree
remains in place.
After a review of the pertinent filings related to the pending R&R, the Court finds that
the Magistrate Judge more than adequately addressed the parties' arguments and correctly
determined that the Court should grant the Government's Motion to Substitute John
In light of Court's prior Order regarding the specific sections of the Consent Decree regarding Defendants'
remaining payment of monetary damages (Doc. 106), Defendant John Klosterman's submission of a check
in the amount of $15,000.00 to this Court (Doc. 107), the Clerk's holding of those funds in an interest-bearing
account, and the Government's submission related to those funds (Doc. 111), the Court excludes Defendants'
failure to abide by ¶¶ 27-32 of the Consent Decree in calculating this number. See (Doc. 103 PageID 539295).
2
1
Klosterman for Defendant Susan Klosterman and Motion to Enforce the Consent Decree,
as construed as a motion to reopen this case to Enforce the Consent Decree, and that the
Court should enter a Contempt Order (Doc. 103); see 28 U.S.C. § 636(b); FED. R. CIV.
P. 72. Defendant John Klosterman's objections do not persuade the Court otherwise, as
he admits to violating the Consent Decree in those objections. E.g., (Doc. 108
PageID 5491) ("I am now communicating with 1 tenant . . ."). The Court will adopt the R&R
in its entirety except as to those portions regarding Defendants' remaining payment of
monetary damages, as Defendant John Klosterman is now working with the Court and
Government to resolve those violations of the Consent Decree, see supra note 1, and with
slight changes to two of the Contempt Order deadlines.
Based on the foregoing, the Court ADOPTS the R&R (Doc. 103) its entirety except
as to those portions regarding Defendants' remaining payment of monetary damages and
with slight changes to two of the Contempt Order deadlines. Consistent with the
recommendations therein, it is ORDERED that:
1. Plaintiff's Motion to Substitute John Klosterman for Defendant Susan Klosterman
(Doc. 101) is GRANTED;
2. Plaintiff's Motion to Enforce the Consent Decree, as construed as a motion to reopen
this case to Enforce the Consent Decree, (Doc. 95) is GRANTED;
3. The Court ENTERS a finding of CIVIL CONTEMPT against both Defendant John
Klosterman individually and as substitute for Susan Klosterman, and INCLUDES the
following provisions as a CONTEMPT ORDER:
a. The term of the Consent Decree (Doc. 92) is hereby EXTENDED until July 1,
2026;
3
b. The prefatory language in ¶ 13 and ¶ 22 of the Consent Decree is hereby
interpreted and formally reformed in the manner discussed in the R&R at
(Doc. 103 PageID 5386, 5391);
c. The following prospective monetary sanctions are hereby ADDED to the terms
of the original, and now-extended, Consent Decree:
i. $100 per day shall be paid to the Government if, within fourteen (14) days
of this Contempt Order, Defendant John Klosterman has not proposed to
the Government a professional Independent Manager who has
experience with property management and does not have any personal
relationship with Defendants, pursuant to ¶ 13 of the Consent Decree.
Such daily fine shall continue until Defendant John Klosterman has made
a proposal that complies with the requirements of ¶ 13, but should not
exceed thirty (30) days absent further Order of this Court;
ii. $100 per day shall be paid to the Government if, within fourteen (14) days
of this Contempt Order, Defendant John Klosterman has not proposed to
the Government Fair Housing Act training for himself and for any
employees and agents pursuant to ¶¶ 22 and 23 of the Consent Decree.
Such daily fine shall continue until Defendant has made a proposal that
complies with the requirements of the Consent Decree, but should not
exceed thirty (30) days absent further Order of this Court; 2
The Government shall review Defendant John Klosterman's contention that he cannot comply with the
training requirement during his incarceration. If no training is possible for Defendant John Klosterman at this
time, the parties shall employ their best efforts to propose a reasonable modification of ¶ 22 for Defendant
John Klosterman only, and shall so notify the Court.
4
2
iii. $500 per incident shall be paid to the Government as an additional fine
if, on any occasion following the issuance of this Contempt Order,
Defendant
John
Klosterman
engages
in
property
management
responsibilities that are specifically prohibited by the terms of the Consent
Decree; and $500 per incident shall be paid to the Government as an
additional fine if, on any occasion following the issuance of this Contempt
Order, Defendant John Klosterman communicates with tenants or
prospective tenants in violation of the Consent Decree;
1. the fine(s) specified in this paragraph (iii) shall not exceed a total
of $5,000 absent further Order of this Court, and may be excused
upon clear and convincing evidence by John Klosterman that
communication was required on an emergency, i.e., sudden and
serious, basis;
d. Within ten (10) days of the date of the issuance of this Contempt Order,
Defendant John Klosterman shall be required to provide to the Government a
complete list of all rental properties that John and/or Susan Klosterman have
owned, leased, managed, or otherwise controlled (directly or indirectly)
beginning on October 1, 2020, through the present date.
i. Said list shall be verified with a declaration made under penalty of perjury
pursuant to 28 U.S.C. § 1746 to ensure that the Government has a
complete list of past and current holdings;
e. Within ten (10) days of the date of the issuance of this Contempt Order,
Defendant John Klosterman shall provide to the Government a full accounting
5
of incomes and expenses at all properties owned, leased, managed or controlled
by Defendants outside of the Receivership since October 1, 2020, including
bank records, rent receipts, and receipts for any expenses for the maintenance
of the properties which Defendants maintain should be deducted from the
calculation of profits;
i. Defendant John Klosterman's prior attempt at submitting this information
in his Objections (Doc. 108 PageID 5420) is wholly inadequate and does
not meet the specificity compelled by this Contempt Order;
ii. Following receipt of this information, the Government may, in its
discretion, move the Court to require Defendants to pay rental profits into
a fund for the Independent Manager's maintenance of the properties, to
restore the parties to the position that they would have been in but for
Defendants' noncompliance with the Consent Decree, and to ensure that
sufficient funds are available for property management going forward;
f. Within ten (10) days of the date of the issuance of this Contempt Order, and
every ninety (90) days thereafter for the duration of the Consent Decree,
Defendant John Klosterman shall file with this Court a certification affirmatively
stating that he has complied with all Consent Decree requirements including but
not limited to the additional requirements entered with this Contempt Order; AND
g. The requirement for the parties to endeavor in good faith to resolve informally
any differences regarding interpretation of and compliance with the Consent
6
Decree, as set forth in ¶ 46 of the Consent Decree, 3 shall continue along with all
other provisions unless modified by this Contempt Order.
4. Out of an abundance of caution, and in light of the Contempt Order contained herein,
the Clerk is hereby ORDERED to mail Defendant John Klosterman one copy each of
the Consent Decree (Doc. 92), the R&R (Doc. 103), and this Order.
IT IS SO ORDERED.
3
/s Michael R. Barrett______
Michael R. Barrett, Judge
United States District Court
Paragraph 46 includes, but is not limited to, resolution of any future defense of impossibility of performance.
7
Disclaimer: Justia Dockets & Filings provides public litigation records from the federal appellate and district courts. These filings and docket sheets should not be considered findings of fact or liability, nor do they necessarily reflect the view of Justia.
Why Is My Information Online?