BP Products North America Inc. v. Premier Oil Company, LLC et al

Filing 108

ORDER denying 94 Motion to Hold Defendant Richard K. Rice in Contempt, and ORDER Setting Schedule for Objections to Fees and Expenses. Signed by Chief Judge Jon Phipps McCalla on 8/12/13. (McCalla, Jon)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF TENNESSEE
WESTERN DIVISION

BP PRODUCTS NORTH AMERICA INC.,
Plaintiff,

v.
PREMIER OIL COMPANY, LLC;
POC REAL ESTATE COMPANY, LLC;
M. KYLE RICE;
and RICHARD K. RICE,
Defendants.

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No. 2:11-cv-2162-JPM-cgc

ORDER DENYING PLAINTIFF’S MOTION TO HOLD DEFENDANT RICHARD K.
RICE IN CONTEMPT
AND
ORDER SETTING SCHEDULE FOR OBJECTIONS TO FEES AND EXPENSES

Before the Court is Plaintiff BP Products North America,
Inc.’s (“Plaintiff” or “BP”) Motion to Hold Defendant Richard K.
Rice in Contempt of Court and to Enforce December 17, 2012 Order
Against Defendant Richard K. Rice, filed July 2, 2013.
94.)

(ECF No.

Defendant Richard K. Rice (“Defendant” or “Rice”) filed

his Response in Opposition (ECF No. 96) on July 16, 2013.
A telephonic hearing on the Motion was held on August 12,
2013.

Julia Voss and Dawn Johnson were present for Plaintiff

BP; Jonathan Stokes was present for Defendant Richard K. Rice;
and Robert F. Miller were present for Defendant M. Kyle Rice.
For the reasons that follow, Plaintiff’s Motion is DENIED.

I.

BACKGROUND
The background of the instant case is set forth in detail

in the Court’s December 17, 2012 Order Granting Defendant
Richard K. Rice’s Motion for Leave to Amend/Suspend Scheduling
Order to File Amended Answer (ECF No. 48), which the Court
incorporates by reference.

Pursuant to the Court’s Order, the

Court allowed Richard Rice to file an amended Answer in his
individual capacity.

(Id. at 17.)

The Order also provided for

a sixty (60) day period of reopened discovery, to be paid for by
Rice.

(Id.)

The Court stated,

The Court therefore REOPENS discovery for a period of
sixty (60) days from the entry of this Order.
This
limited discovery will relate to the issues created by
Rice’s Amended Answers that refute those admissions in
the Defendants’ original Answer.
BP’s reasonable costs, expenses, and fees of the
reopened discovery, plus the additional costs to BP of
preparing and filing a new Motion for Summary Judgment
shall be paid by Defendant Richard K. Rice.
If the
parties are unable to reach agreement as to the amount
of fees, expenses, and costs to be paid by Rice, said
issue shall be submitted to the Court.
(Id.)
The Court subsequently extended the deadline to complete
the reopened discovery by thirty days on January 22, 2013 (ECF
No. 69), by an additional thirty days on March 11, 2013 (ECF No.
80), and by an additional fourteen days on April 15, 2013 (ECF
No. 83).

All extensions were unopposed.

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A.

The Invoices

After entry of the Order, on December 21, 2012, BP sent an
“Estimate For Discovery Tasks Necessary Due to Richard Rice
Amendment and to be Paid for by Richard Rice,” which estimated
the reopened discovery costs to be $64,720.

(ECF No. 94-2.)

In a letter dated March 21, 2013, BP sent its first invoice
for discovery costs for December 2012 and January 2013, totaling
$20,193.50.

(ECF No. 96-4; ECF No. 96-11; ECF No. 96-12; see

also ECF No. 88-5 at PageID 1298–1307.)

BP indicated it

expected payment within thirty days of the date of the letter.
In a letter dated May 20, 2013, BP sent its second invoice
for discovery costs for February, March, and April 2013,
totaling $37,992.59.
PageID 1308–19.)

(ECF No. 96-10; see also ECF No. 88-5 at

BP indicated it expected payment within thirty

days of the date of the letter.
In a letter dated June 6, 2013, BP sent its third invoice
for discovery costs for May 2013 and the first few days of June
2013, totaling $4,786.35.

(ECF No. 96-5; ECF No. 96-9; see also

ECF No. 88-5 at PageID 1320–22.)

BP indicated it expected

payment within thirty days of the date of the letter.

BP also

noted Rice had not paid any of the previous invoices, that the
thirty-day timeframe in which to do so had elapsed, and that if
Rice did not pay by June 21, 2013, BP would file a motion
requesting Rice be held in contempt.
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B.

Communications Between the Parties Regarding the
Invoices

On April 26, 2013, BP sent an email to Rice requesting the
status of Rice’s payment of the discovery invoices.
93-4.)

(ECF No.

On May 7, 2013, BP sent a second email to Rice

requesting an update as to when Rice would pay the overdue
invoices.

(Id.)

The same day, Rice responded that he did not

have the means to pay the amounts in full, but could comply with
a payment schedule.

(Id.)

Rice also proposed to reserve the

issue of fees “until a judgment/settlement has been reached.”
(Id.)
On May 9, 2013, BP inquired as to the payment schedule and
did not agree to reserve the issue until the end of the case.
(ECF No. 94-4.)
On May 20, 2013, BP sent its second invoice and inquired
again as to the payment schedule.

(ECF No. 94-5.)

Rice’s

counsel responded that counsel was waiting to hear from Rice.
(Id.)
On June 6, 2013, BP asked again for a payment schedule.
(ECF No. 94-6.)
On June 25, 2013, via telephone, Rice “offered to pay BP
approximately $1100 a month for 60 months until the payment was
made.”

(Voss Aff. ¶ 18, ECF No. 94-1.)

Alternatively, Rice

offered to pay the “fees within 90 days, but at a 40–50%

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discount.”

(Id.

But see Rice Aff., ECF No. 96-8 ¶ 7 (stating

Rice “offered to pay sixty percent (60%) of the demanded
attorney fees within ninety (90) days”).)
rejected.

The offer was

(Voss Aff. ¶ 19, ECF No. 94-1.)

On June 27, 2013, via telephone, BP offered to allow Rice
“to pay the fees over 90 days by paying $25,000.00 up front,
followed by two payments of $20,000.00.”

(Id. ¶ 22.)

On June 28, 2013, Rice offered to pay the fees in the
amount of $2000 per month for approximately thirty months.
¶ 23; ECF No. 94-8.)

(Id.

BP declined the offer and filed the

instant Motion.
II.

STANDARD OF REVIEW
The movant in a civil contempt proceeding bears the burden

of proving by clear and convincing evidence that the respondent
“violated a definite and specific order of the court requiring
[him] to perform or refrain from performing a particular act or
acts with knowledge of the court’s order.”

Rolex Watch U.S.A.,

Inc., 74 F.3d 716, 720 (6th Cir. 1996) (internal quotation marks
omitted).

The movant “is only required to show that the [non-

movant] had knowledge of and violated the court’s order.”
Watch U.S.A., 74 F.3d at 721.

Rolex

“In order to make a prima facie

case of contempt, the moving party is required only to
demonstrate that certain conduct was required by a previous
court order and that the alleged contemnor failed to comply.”
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United States v. Dye, No. 09-2097-STA, 2009 WL 2579662, at *4
(W.D. Tenn. Aug. 18, 2009).

The court “requires that the prior

order be ‘clear and unambiguous’ to support a finding of
contempt.”

Liberte Capital Grp., LLC v. Capwill, 462 F.3d 543,

550 (6th Cir. 2006) (quoting Grace v. Ctr. for Auto Safety, 72
F.3d 1236, 1241 (6th Cir. 1996)).

“Ambiguities must be resolved

in favor of the persons charged with contempt.”

Id. at 551.

Once the movant establishes its prima facie case, the
burden shifts to the non-movant, see Rolex Watch U.S.A., 74 F.3d
at 720, and the non-movant “must show categorically and in
detail why he or she is unable to comply with the court’s
order.”

Elec. Workers Pension Trust Fund of Local Union #58 v.

Gary’s Elec. Serv. Co., 340 F.3d 373, 383 (6th Cir. 2003)
(quoting Rolex Watch U.S.A., 74 F.3d at 720) (internal quotation
marks omitted).

When evaluating a non-movant’s failure to

comply, the court must consider whether the non-movant “took all
reasonable steps within [his] power to comply with the court’s
order.”

Elec. Workers, 340 F.3d at 383 (alteration in

original).

A non-movant may defend against contempt by

producing evidence to show that he is presently unable to comply
with the court order.

Id. at 383.

The present inability cannot

be due to the non-movant’s own actions.

Id.

Also, failure to

comply with a court order will not be excused for “mere
financial hardship.”

United States v. Work Wear Corp., 602 F.2d
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110, 116 (6th Cir. 1979).
III. ANALYSIS
In the instant case, it is undisputed that Rice was aware
of the Court’s Order and has yet to comply.

(See ECF No. 94-7

at 5:10-15; see also ECF No. 96-1 (emails from January 14, 2013,
stating Rice was reserving his right to contest the amount of
attorneys’ fees); Rice Aff., ECF No. 96-8 ¶ 3 (“I am aware of
the language of this Court’s Order dated December 17, 2012 . . .
and the obligations imposed upon me pursuant to said Order.”).)
The Court also finds that its Order was unambiguous as to what
costs and fees Rice for which he is responsible.

The Court

further finds the Order is unambiguous in stating that only
disputes “as to the amount of fees, expenses, and costs to be
paid by Rice” would be submitted to the Court.

The Order did

not state the Court would screen the reasonableness of BP’s fees
before they were invoiced to Rice.

Rice’s apparent

misunderstanding of the Order and argument that he has not had a
chance to “appropriately challenge these fees” is unavailing:
Rice received invoices for the proposed fees as early as March
21, 2013, but raised no issued with the Court.
The Court finds, however that the Order does not state a
date by which the fees must be paid.

While BP stated in each of

its invoices that it expected payment within thirty days of the
date of the letter accompanying each invoice, see ECF No. 96-4
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and ECF No. 96-5, the Court finds its Order was not “clear and
unambiguous” with respect to the dates by which the discovery
costs were to be paid.

As a result, a finding of contempt is

inappropriate and Plaintiff’s Motion is DENIED.
Having determined the Court’s Order was not “clear and
unambiguous” regarding the date by which the discovery costs
were to be paid, the Court need not determine whether Defendant
met his burden to show that he took all reasonable steps to
comply with the Court’s Order.
IV.

CONCLUSION
For the foregoing reasons, Plaintiff’s Motion is DENIED.
Regarding Defendant’s argument that he “has not had the

opportunity to appropriately challenge these [discovery] fees”
(ECF No. 96 at 13), for the reasons stated at the hearing, the
Court requires Defendant to file any objections to the
reasonableness of the fees within fourteen (14) days from the
entry of this Order.

Each objection to BP’s invoices must be

set forth in a specific, line-by-line manner.

BP shall file any

response to Defendant’s objections within fourteen (14) days of
the filing of the objections.
If Defendant takes the position that he is unable to pay
the discovery costs in a lump sum, the Court DIRECTS Defendant
to file a certified financial statement and shall additionally
specifically provide all bank and financial account balances
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(stocks, bonds, securities, and financial instruments of any
kind), assets and liabilities, statement of net worth, and
monthly expenses within fourteen (14) days of entry of this
Order.

IT IS SO ORDERED, this 12th day of August, 2013.

/s/ Jon P. McCalla
CHIEF JUDGE, U.S. DISTRICT COURT

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