UNITED STATES OF AMERICA v. LORENO et al

Filing 94

MEMORANDUM OPINION AND ORDER granting 84 USA's Motion to Compel Discovery responses by Larry Loreno; finding Loreno in civil contempt of court; and issuing an arrest warrant to begin on December 8, 2014, as explained therein. Attorney Bartholomew to deliver this Opinion to Loreno FORTHWITH.. Signed by Judge Terrence F. McVerry on 11/26/14. (mh, )

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
UNITED STATES OF AMERICA,
Plaintiff,
v.
LARRY A. LORENO, et al.,
Defendants.

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1:10-cv-183

MEMORANDUM OPINION AND ORDER
Now pending before the Court are two related matters: (1) the UNITED STATES’
MOTION TO COMPEL LARRY LORENO TO RESPOND TO DISCOVERY (ECF No. 84),
with affidavit and exhibits in support; and (2) the consequences of Larry A. Loreno’s failure – on
two (2) occasions – to appear personally at Court-scheduled hearings to determine whether or not
he should be held in contempt of court for failing to respond to that discovery. In other words,
should Loreno be held in contempt in absentia for failing to appear at his Court-ordered
contempt hearing(s)?

Factual and Procedural Background
This is a case to recover unpaid federal taxes by Larry A. Loreno for tax years 2000,
2001, and 2002. The litigation has been pending for four years, and counting. The Court has
previously entered Judgment in favor of the United States and against Loreno; has authorized the
United States to pursue forced sales of the real properties at issue in Counts II, III, IV and VII of
the complaint; and has authorized the United States to conduct discovery into Loreno’s other
financial assets, including but not limited to the firearm collection in Count VIII, so that the
government may have its judgment satisfied.
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The United States served interrogatories and document requests on Loreno in August
2014. Loreno ignored them entirely – he had no communication with the government or the
Court. On October 6th and 10th, government attorney Geoffrey Klimas left messages for
Loreno’s attorney of record, P. Raymond Bartholomew. On October 14th, Bartholomew
promised Klimas that complete discovery responses would be provided by the end of that week.
See Klimas Declaration. When no responses were forthcoming, the United States filed the
pending Motion to Compel.
On October 27, 2014, the Court ordered Loreno and Bartholomew to appear personally
on November 4, 2014 at 2:00 p.m., to show cause why Loreno should not be held in civil
contempt of Court. On October 30th, Loreno belatedly provided some discovery responses to the
government. The United States reported that Loreno had failed to adequately respond to its
interrogatories requests and had failed to produce any documents whatsoever. Thus, the Court
did not cancel the contempt hearing.
At approximately 12:10 p.m., on November 4, 2014, the Court received a telephone call
from Bartholomew, who reported that Loreno would be unable to attend the hearing that day due
to his medical condition. With the consent of the government, the Court postponed the hearing.
Bartholomew was instructed by the Court to confer with the United States and to file a motion
with dates on which the contempt hearing could be re-scheduled. One of the three dates
proposed by Loreno was November 20, 2014 at 2:00 p.m., which the Court accommodated.
Loreno and Bartholomew were again ordered to appear personally.
Loreno was also ordered to provide to the Court a signed medical excuse from his
physician to justify his failure to attend the hearing on November 4, 2014, as ordered. On
November 10, 2014, Loreno submitted a letter from Anthony F. Uberti, M.D., of New
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Wilmington Family Med Assoc., P.C. The letter generally described Loreno’s medical history
and noted possible deficits in his memory and concentration. Dr. Uberti stated that Loreno “has
had issues with this for quite some time.” Dr. Uberti’s letter is completely silent as to whether
Loreno’s medical condition rendered him physically unable to attend Court, as ordered, on
November 4, 2014. There is no evidence that Dr. Uberti treated Loreno on November 4th, or that
Dr. Uberti specifically instructed Loreno not to travel to Pittsburgh on that day. As noted above,
the Court was given no advance notice of Loreno’s alleged inability to appear in person.
On November 20, 2014 at 2:00 p.m., the date and time of the re-scheduled contempt
hearing, neither Loreno nor Bartholomew was present in the courtroom. Nor had either of them
contacted the Court to notify the Court that they would be tardy and/or absent. The Court’s staff
telephoned Dr. Uberti in an effort to discover Loreno’s whereabouts. The Court learned that
Loreno had self-reported to the emergency room at 7:37 a.m. that morning, complaining of chest
pains; had been given a sedative; and had been discharged at 9:32 a.m. At 2:30 p.m.,
Bartholomew belatedly arrived in the courtroom, and advised that he had been delayed by court
security. Neither Bartholomew nor the security desk notified the Court of any such delay.1
Bartholomew represented that he and Loreno had gone to Loreno’s office on November 19th, in

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Batholomew stated that it is a two-hour drive from his office in Hermitage, Pennsylvania to the Court in
Pittsburgh, assuming good weather and normal traffic. The Court takes judicial notice that the Google Maps
Driving Directions reflect that it takes only one hour and 11 minutes to make that drive. Similarly contrary to
Bartholomew’s statement to the Court, it takes only one hour and 9 minutes to drive from Loreno’s office in
Greenville, Pennsylvania to Erie, Pennsylvania.

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an effort – apparently their first and only effort -- to comply with the government’s document
requests, but had been unsuccessful.2
During the hearing, the Court notified Bartholomew of its intention to hold Loreno in
contempt of court. However, it took the matter under advisement and requested that the
government provide a more-detailed status report. On November 25, 2014, the government filed
a Status Report regarding the shortcomings in Loreno’s discovery responses. ECF No. 93. In
summary, the United States reports that Loreno’s responses were incomplete and apparently
untruthful, as they conflicted with the Master’s Report from his divorce proceeding and the
deposition testimony of his ex-wife. To wit, the government reports that Loreno failed to fully
and truthfully disclose his income; his interest in a corporation; a full list of his business and
personal financial accounts; his real estate holdings; his vehicles; his firearms and the proceeds
from the sale of his firearms collection; his personal property; and his expenses. The United
States reports that Loreno has still not produced ANY documents.

Findings of Fact and Conclusions of Law
In order to find a party in civil contempt, the Court “must find that (i) a valid court order
existed, (ii) the [party] had knowledge of the order, and (iii) the [party] disobeyed the order.”
John T. ex rel. Paul T. v. Delaware County Intermediate Unit, 318 F.3d 545, 552 (3d Cir.2003)
(quoting Harris v. City of Philadelphia, 47 F.3d 1311, 1326 (3d Cir.1995)). A finding of civil
contempt must be supported by “clear and convincing evidence.” Id. Thus, “[a] contempt citation

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Bartholomew also informed the Court that Loreno’s mother had recently died and that partial payment of
Loreno’s debt to the United States could be made by selling a parcel of real estate owned by her. The Court
ordered Bartholomew to provide details to the government within seven (7) days.

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should not be granted if there is ground to doubt the wrongfulness of the [party]'s conduct.”
Harris, 47 F.3d at 1326. Similarly, the “resolution of ambiguities ought to favor the party
charged with contempt.” Id. However, “[t]he validity of the underlying order is not open to
consideration.” Id.
To excuse non-compliance, the burden is on Loreno to “introduce evidence beyond ‘a
mere assertion of inability,’ and to show that he has made ‘in good faith all reasonable efforts to
comply.’” Harris, 47 F.3d at 1324 (citations omitted). However, good faith alone is not a
defense to civil contempt and willfulness is not a necessary element. Robin Woods, Inc. v.
Woods, 28 F.3d 396, 399 (3d Cir.1994).
The Court finds and concludes, by clear and convincing evidence, that Larry A. Loreno is
in civil contempt of court. The Court finds that valid court orders exist, which authorized the
government to pursue post-judgment discovery; and required Loreno to appear personally in
Court on November 4, 2014 and November 20, 2014 (ECF Nos. 86, 89). The Court finds that
Loreno had knowledge of the orders and a full and fair opportunity to be heard, in that his
attorney, Mr. Bartholomew, called the Court on November 4th; and was personally present in
Court on November 20th. See also Medical Letter provided by Loreno. ECF No. 91. Moreover,
attorney Bartholomew interacted with the attorneys for the government regarding Loreno’s
discovery obligations and promised that discovery responses would be provided by the week of
October 14th. The Court finds that Loreno has been engaged in lengthy, obstructionist
disobedience of the orders of this Court and obstinate refusal to pay his tax debt. The Court
finds that Loreno’s proffered medical excuses for his failures to appear in Court are neither
verified nor convincing. The letter of Dr. Uberti was post-hoc and generalized, and did not
specifically excuse Loreno from travel on November 4th. As to November 20th, Loreno self5

reported to the emergency room, but was discharged at 9:32 a.m. Neither he nor his attorney
made any effort to notify the Court of this development or to seek a continuance of the hearing.3
Nor has a medical opinion regarding his inability to travel been provided. Moreover, several
months have now elapsed during which Loreno has continually failed to comply with his
discovery obligations – and Loreno has failed to pay his tax debt for over a decade.
Accordingly, Loreno has failed to show that he made good faith, reasonable efforts to comply
with the Court’s orders.
Sanctions for civil contempt of a court order are designed to serve two purposes: (1) to
coerce compliance with the Order; and (2) to compensate for losses sustained by the opposing
party due to the disobedience. Marshak v. Treadwell, 595 F.3d 478, 494 (3d Cir. 2009).
Unfortunately, it appears that Loreno must be coerced into providing full and complete responses
to the discovery requests made by the government. Loreno’s intransigence will not be tolerated
any longer.
Attorney Bartholomew represented to the Court during the November 20th hearing that
Loreno and he were unable to locate responsive documents in Loreno’s office on November 19,
2014. Accordingly, the Court is inclined to permit the government to enter Loreno’s office (and
other locations if necessary) to inspect those premises in an effort to obtain such documents, if
the government so requests. See Fed. R. Civ. P. 34(a)(2) (entry onto land); Fed. R. Civ. P.
45(a)(1)(C) and (c)(2)(B) (inspection of premises).
An appropriate Order follows.
McVerry, J.
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Although Bartholomew stated that he had spoken to Loreno’s doctor on November 19 , he made no effort to
communicate with the Court.

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IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF PENNSYLVANIA
UNITED STATES OF AMERICA,
Plaintiff,
v.
LARRY A. LORENO, et al.,
Defendants.

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1:10-cv-183

ORDER OF COURT
AND NOW, this 26th day of November, 2014, in accordance with the foregoing
Memorandum Opinion, it is hereby ORDERED, ADJUDGED and DECREED that the
UNITED STATES’ MOTION TO COMPEL LARRY LORENO TO RESPOND TO
DISCOVERY (ECF No. 84) is GRANTED.
Moreover, Larry A. Loreno is hereby adjudged in civil contempt of court. A bench
warrant shall be issued for Loreno’s arrest and imprisonment, beginning on December 8, 2014
and continuing until he has fully complied with his discovery obligations. Loreno may purge the
civil contempt by providing full and complete responses to the discovery requests made by the
government, as set forth in the government’s status report (ECF No. 93). Counsel for the
government shall advise the Court immediately when Loreno is in full compliance.
Attorney Bartholomew shall deliver this Memorandum Opinion and Order to Loreno
FORTHWITH.

BY THE COURT:
s/ Terrence F. McVerry
United States District Judge
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cc:

Geoffrey J. Klimas, Esquire
Email: [e-mail]
Katherine Reinhart
Email: [e-mail]
P. Raymond Bartholomew, Esquire
Email: [e-mail]
Kevin Rakowski, Esquire
Email: [e-mail]
Thomas S. Kubinski, Esquire
Email: [e-mail]
Gary L. Lawhead and Tina L. Gilpin
56 Wood Street
Franklin, PA 16323
(Via US Mail)

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