Church Mutual Insurance v. Maafu et al

Filing 119

MEMORANDUM DECISION AND ORDERgranting 76 Motion to Stay ; denying 90 Motion to Compel; denying 111 Motion for Sanctions. Signed by Judge David Sam on 2/17/16. (jmr)

UNITED STATES DISTRICT COURT
DISTRICT OF UTAH, CENTRAL DIVISION

CHURCH MUTUAL INSURANCE,

MEMORANDUM DECISION
AND ORDER

Plaintiff,

v.
2:13-CV-00672-DS
ETIMANI MAAFU, AN INDIVIDUAL;
ROCKY MOUNTAIN CONFERENCE OF
District Judge David Sam
THE UNITED METHODIST CHURCH, A
COLORADO NON-PROFIT CORPORATION;
SALT LAKE CITY LAUMALIE MAONIONI
FREE WESLEYAN CHURCH OF TONGA, A
UTAH NON-PROFIT CORPORATION;
VILIAMI HOSEA, AN INDIVIDUAL; HAVILI
MONE, AN INDIVIDUAL; MANASE
VAILEA, AN INDIVIDUAL; AISEA NAI, AN
INDIVIDUAL; SIOSAIA HAUKINIMA, AN
INDIVIDUAL; LYNDON LAUHINGOA, AN
INDIVIDUAL; AND MELANIE NGAUE, AN
INDIVIDUAL;

Defendants.

Defendants Etimani Ma’Afu and Rocky Mountain Conference of the United Methodist
Church (“RMC”) (“United Methodist Defendants”) have filed this Motion for Contempt

Sanctions and Memorandum in Support. They assert that Church Mutual has refused to comply
with this Court’s Order to pay the defense costs of RMC and to provide a defense to Mr.
Ma’Afu, and that Church Mutual is in direct and willful violation of the Court’s Order, and
should be held in contempt and sanctioned. Church Mutual, on the other hand, argues that it has
specifically appealed both the merits of the case and the directive that Church Mutual pay
defense costs and other legal fees, which is integral to the appeal. The Tenth Circuit has
expressly stated that the jurisdictional issues and the substantive issues appealed from will be
decided by the merits panel. Thus, according to Church Mutual, this motion seeks to have the
Court invade the jurisdiction of the Tenth Circuit and otherwise deprive Church Mutual of the
procedural protections afforded by applicable law. This Court, after carefully consideration of
the submitted memoranda, hereby denies the United Methodist Defendants’ Motion for
Contempt Sanctions.
On August 5, 2015, this Court granted the United Methodist Defendants’ Motion for
Partial Summary Judgment on Church Mutual’s duty to defend, and directed Church Mutual to
defend Mr. Ma’Afu and to pay legal fees of the Rocky Mountain Conference. Church Mutual
timely appealed to the Tenth Circuit, under 28 U.S.C. § 1292(a)(1), on the assumption that the
Court’s directive constitutes injunctive relief that is immediately appealable. The United
Methodist Defendants filed with the Tenth Circuit a motion to dismiss Church Mutual’s appeal
for lack of jurisdiction. The Tenth Circuit Court of Appeals issued an order explaining that it
will address the jurisdictional issues when it addresses the parties’ substantive briefing. The
United Methodist Defendants then filed this Motion for Contempt Sanctions, requesting that the
Court (1) enter judgment against Church Mutual for $702,136.95 in defense costs incurred by
RMC and Mr. Ma’Afu through August 2015 plus all subsequent defense fees and costs; (2) order

that Church Mutual pay interest at the rate of 10% per annum on that amount from the date of the
Court’s August 5, 2016 Order until the date of the Court’s ruling on this motion, and (3) order
that Church Mutual pay the United Methodist Defendants’ attorney fees and costs associated
with seeking to enforce the Court’s Order.
ANALYSIS
To succeed on a motion for contempt, a party “must prove, by clear and convincing
evidence, that (1) each order at issue was valid and enjoined conduct in reasonable detail; (2) the
enjoined party had actual knowledge of the order . . . ; and (3) the enjoined party disobeyed the
order.” 1 The United Methodist Defendants argue that the factors for contempt are met in this
case. The Court issued a clear order requiring Church Mutual to defend Mr. Ma’Afu in the state
court consolidated lawsuit and to pay legal fees to RMC. Church Mutual does not dispute that it
has knowledge of the Order. And Church Mutual has not complied with the Order.
The United Methodist Defendants rely on Fed. R. Civ. P. 62(a), which expressly provides
that “unless the court orders otherwise, the following are not stayed after being entered, even if
an appeal is taken: (1) an interlocutory or final judgment in an action for an injunction. . . .” If
the Court’s Order is an injunction—and Church Mutual clearly agrees that it is, having initiated
an appeal based on its own argument that the Court’s Order is an injunction—then absent a court
order, it would not be stayed, even if an appeal is taken.
However, in this case, Church Mutual has appealed not only the injunctive relief
awarded, but the merits determinations on which the injunctive relief was based—the same
merits determination which RMC and Ma’Afu seek to enforce in their contempt motion. RMC

1

ClearOne Communications, Inc. v. Bowers, 651 F.3d 1200 (10th Cir. 2011).

and Ma’Afu challenged both Church Mutual’s right to appeal and the scope of the appeal by
filing a motion to dismiss in the Tenth Circuit. But their motion was not granted. Instead, the
Tenth Circuit specifically ordered that the jurisdictional issues raised by the motion to dismiss
will be decided by the panel that addresses the merits of the appeal. Thus both substantive and
jurisdictional issues related to this appeal remain pending with the Tenth Circuit. A decision by
this Court on any issue currently pending before the Tenth Circuit would run the risk of
conflicting with the Tenth Circuit’s decision, further complicating and extending the litigation.
It should also be noted that this is a case where attorney fees and legal costs are central to
the merits of the claims and subject to evidentiary and procedural rules. When “[a]ttorneys’ fees
are an item of damage alleged . . . they must be proved and established and their reasonableness
shown just like any other element of damage.” 2 The United Methodist Defendants have the
burden of proving damages, if they are awardable. If and when the Tenth Circuit affirms this
Court’s order granting summary judgment in favor of RMC and Ma’Afu, and remands for a
determination of damages, then their damage claim can proceed accordingly, with Church
Mutual having the right to conduct reasonable discovery.
CONCLUSION
For the reasons discussed above, United Methodist Defendants’ Motion for Contempt
Sanctions (Dkt. No. 111) is hereby denied.
Also, in keeping with Court’s desire not to run the risk of conflicting with the Tenth
Circuit’s decision, or further complicating and extending the litigation, this Court also hereby
grants Church Mutual’s Motion to Stay Plaintiff’s Responses to Defendant’s request for

2

Crist v. Ins. Co. of N. America, 529 F.Supp. 601, 605 (D. Utah 1982).

Production of Documents (Dkt. No. 76), until the Tenth Circuit issues its opinion. The Court
also denies the United Methodist Defendant’s Motion to Compel Responses to Discovery (Dkt.
No. 90).
DATED this 17th day of February, 2016.
BY THE COURT:

DAVID SAM
United States District Judge