UNITED STATES OF AMERICA v. Walden et al

Filing 80

MEMORANDUM OPINION AND ORDER GRANTING UNITED STATES' MOTION TO HOLD DEFENDANTS IN CIVIL CONTEMPT (DKT. NO. 74 ). Signed by Senior Judge Irene M. Keeley on 3/4/19. (Copy to guardian ad litem D. Scudiere via CM/ECF)(mh)

IN THE UNITED STATES DISTRICT COURT
FOR THE NORTHERN DISTRICT OF WEST VIRGINIA

UNITED STATES OF AMERICA
Plaintiff,
v.

//

CIVIL ACTION NO. 1:16CV42
(Judge Keeley)

GARY WALDEN;
BRIAN CARL WALDEN,
as Conservator for Gary Walden,
a protected person;
BRIAN CARL WALDEN,
as Administrator CTA of the Estate
of the deceased Tina Walden;
WALDEN HOMES, LLC;
d/b/a Walden Rentals; and
973 CHESTNUT RIDGE ROAD, INC.
Defendants.

MEMORANDUM OPINION AND ORDER GRANTING THE MOTION OF THE UNITED
STATES TO HOLD DEFENDANTS IN CIVIL CONTEMPT [DKT. NO. 74]
Pending
(“United

is

the

States”),

motion
seeking

of

the

to

hold

United
the

States

of

defendants

America

in

civil

contempt for failing to obey a consent decree entered by the
Court on July 10, 2017. For the reasons that follow, the Court
GRANTS the motion (Dkt. No. 74).
I.
The United States initiated this action to enforce Title VII
of the Civil Rights Act of 1968 (the “Fair Housing Act”), as
amended,

42

U.S.C.

§

3601,

et

seq.

According

to

the

United

States, the defendants, Gary Walden, Tina Walden, Walden Homes,

UNITED STATES V. WALDEN, ET AL.

1:16CV42

MEMORANDUM OPINION AND ORDER GRANTING THE MOTION OF THE UNITED
STATES TO HOLD DEFENDANTS IN CIVIL CONTEMPT [DKT. NO. 74]

LLC d/b/a Walden Rentals, and 973 Chestnut Ridge Road, Inc.,
engaged

in

unlawful

discrimination

on

the

basis

of

sex

by

subjecting female tenants at their rental properties to severe,
pervasive, and unwelcome sexual harassment in violation of the
Fair Housing Act. Specifically, over a period of at least nine
years Gary Walden engaged in egregious acts of sexual harassment
against

female

residential

tenants

rental

and

prospective

properties

he

owned

tenants

and

managed

at
in

the
the

Morgantown, West Virginia area. See Dkt. No. 31.
Gary Walden’s discriminatory conduct included, but was not
limited to, the following: engaging in unwelcome sex acts with
his female tenants; engaging in unwanted sexual touching and
groping; conditioning or offering tangible housing benefits in
exchange for performance of sex acts; touching himself in a
sexual manner and exposing himself in the presence of female
tenants;
advances;

making

unwanted

entering

the

and

unwelcome

apartments

of

sexual

female

comments

tenants

and

without

permission or notice to sexually harass them; and taking or
threatening

to

take

adverse

housing

actions

against

female

tenants who refused or objected to his sexual advances. Id. at

2

UNITED STATES V. WALDEN, ET AL.

1:16CV42

MEMORANDUM OPINION AND ORDER GRANTING THE MOTION OF THE UNITED
STATES TO HOLD DEFENDANTS IN CIVIL CONTEMPT [DKT. NO. 74]

4-5. Tina Walden failed to take appropriate steps to remedy the
discrimination after receiving tenant complaints about sexual
harassment.
threatened

Indeed,
such

she

actions,

took

adverse

in

housing

retaliation

for

actions,

or

discrimination

complaints. Id. at 5-6.
The United States charged that Tina Walden, Walden Homes,
LLC,

and

973

Chestnut

Ridge

Road,

Inc.

were

liable

for

the

discriminatory conduct of Gary Walden, who was acting as their
agent, and that Gary Walden, Walden Homes, LLC, and 973 Chestnut
Ridge Road, Inc. were liable for the discriminatory conduct of
Tina Walden, who was acting as their agent. Id. at 6.
According to the United States, as a consequence of these
acts

and

statements,

the

defendants

(1)

denied

housing

or

otherwise made housing unavailable because of sex in violation
of

42

U.S.C.

§

3604(a);

(2)

discriminated

in

the

terms,

conditions, or privileges of the rental of dwellings, or in the
provision

of

services

or

facilities

in

connection

therewith,

because of sex, in violation of 42 U.S.C. § 3604(b); (3) made
statements with respect to the rental of dwellings that indicate
a preference, limitation, or discrimination based on sex, in

3

UNITED STATES V. WALDEN, ET AL.

1:16CV42

MEMORANDUM OPINION AND ORDER GRANTING UNITED STATES’S
MOTION TO HOLD DEFENDANTS IN CIVIL CONTEMPT [DKT. NO. 74]
violation of 42 U.S.C. § 3604(c); and (4) coerced, intimidated,
threatened,
enjoyment

or
of,

interfered
or

on

with

account

persons
of

their

in

the

having

exercise

or

exercised

or

enjoyed, their rights under Section 804 of the Fair Housing Act,
all in violation of 42 U.S.C. § 3617. Id. at 7. The United
States

further

asserted

that

female

tenants

and

prospective

tenants were injured by the defendants’ discriminatory conduct,
and that the defendants’ conduct was intentional, willful, and
taken in reckless disregard for the rights of others. Id. at 8.
Through mediation, the parties settled their dispute prior
to trial. Consequently, on July 10, 2017, the Court entered a
consent decree (“Consent Decree,” or “Decree”) (Dkt. No. 73),
requiring the defendant to deposit $500,000.00 into a Settlement
Fund for the purpose of compensating the victims harmed by Gary
Walden’s sexual harassment. Id. at ¶ 22. They agreed to deposit
a first payment of $100,000.00 into the Settlement Fund within
thirty (30) days of entry of the Decree, and to deposit the
remaining balance of $400,000.00 into the Settlement Fund by
January 15, 2018. Id. Further, the terms of the Consent Decree
also

required

the

defendants

to

4

pay

$100,000.00

in

civil

UNITED STATES V. WALDEN, ET AL.

1:16CV42

MEMORANDUM OPINION AND ORDER GRANTING UNITED STATES’S
MOTION TO HOLD DEFENDANTS IN CIVIL CONTEMPT [DKT. NO. 74]
penalties to the United States by January 15, 2018. Id. at ¶ 33.
Finally,

pursuant

to

the

Consent

Decree,

the

Court

retained

jurisdiction over the case in order to enforce compliance with
its terms. Id. at ¶ 38.
Of critical importance to the pending motion, although the
defendants deposited the initial $100,000.00 payment into the
Settlement Fund on August 10, 2017, they never paid the balance
of

$400,000.00

to

the

Settlement

Fund,

nor

did

they

pay

$100,000.00 in civil penalties to the United States. The United
States communicated with counsel for the defendants on numerous
occasions in an effort to secure compliance with the Consent
Decree (Dkt. Nos. 74 at 3; 75 at 3), but those efforts proved
unavailing.

See

also

Dkt.

No.

75-1,

Exhibit

1,

Letter

from

Jackson to Armistead and Scudiere. There is no dispute that the
defendants

are

“fully

aware”

of

their

obligations

under

the

Decree (Dkt. No. 75 at 4-5). Indeed, they have conceded that
they

both

Settlement

failed
Fund

to

and

deposit
also

to

the
pay

United States. Id.

5

additional
the

civil

funds

into

penalties

to

the
the

UNITED STATES V. WALDEN, ET AL.

1:16CV42

MEMORANDUM OPINION AND ORDER GRANTING UNITED STATES’S
MOTION TO HOLD DEFENDANTS IN CIVIL CONTEMPT [DKT. NO. 74]
II.
“There can be no question that courts have inherent power
to enforce compliance with their lawful orders through civil
contempt.” Render’s Mkts., Inc. v. Joppatowne G.P. Ltd. P’ship,
608 F. App’x 130, 131 (4th Cir. 2015) (unpublished decision)
(quoting Shillitani v. United States, 384 U.S. 364, 370 (1966));
see also Chambers v. NASCO, Inc., 501 U.S. 32, 44 (1991). The
Court

may

impose

sanctions

for

civil

contempt

“to

coerce

obedience to a court order or to compensate the complainant for
losses

sustained

Motors

Corp.,

as

61

a

result

of

256,

258

F.3d

the

contumacy.”

(4th

Cir.

In

1995)

re

Gen.

(citation

omitted). “The appropriate remedy for civil contempt is within
the court’s broad discretion.” Id. at 259.
Civil
violated
command”

contempt
“set[s]

that

is

is

appropriate

forth

in

“clear

and

if

specific

the

order

detail

unambiguous.”

Id.

an

said

to

be

unequivocal

Therefore,

in

order to establish that the defendants should be held in civil
contempt, the United States must prove, by clear and convincing
evidence, the following factors:
(1) the
alleged

existence of a valid decree of which the
contemnor
had
actual
or
constructive
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UNITED STATES V. WALDEN, ET AL.

1:16CV42

MEMORANDUM OPINION AND ORDER GRANTING UNITED STATES’S
MOTION TO HOLD DEFENDANTS IN CIVIL CONTEMPT [DKT. NO. 74]
knowledge; (2) the decree was in favor of the party
moving for contempt; (3) the alleged contemnor
violated the terms of the decree by its conduct, and
had
actual
or
constructive
knowledge
of
such
violation; and (4) the moving party was harmed by the
violation.
Ashcraft v. Conoco, Inc., 218 F.3d 288, 301 (4th Cir. 2000)
(citation omitted). Here, the United States has met this heavy
burden.
III.
A.

The Consent Decree is a valid decree of
defendants had actual or constructive knowledge.

which

the

The United States first must establish the existence of a
valid decree of which the defendants had actual or constructive
knowledge. Ashcraft, 218 F.3d at 301. As already discussed, the
parties

voluntarily

resolved

this

litigation

through

a

negotiated Consent Decree, which the Court entered as an Order
on July 10, 2017 (Dkt. No. 73). The terms of the Decree were
negotiated during mediation sessions attended by the guardian ad
litem

for

Gary

Walden

and

defense

counsel

for

the

other

defendants. See Dkt. No. 75-1 at ¶ 4. All of the defendants
agreed to the terms of the Decree as evidenced by the signatures
of their representatives (Dkt. No. 73 at 15). Further, pursuant

7

UNITED STATES V. WALDEN, ET AL.

1:16CV42

MEMORANDUM OPINION AND ORDER GRANTING UNITED STATES’S
MOTION TO HOLD DEFENDANTS IN CIVIL CONTEMPT [DKT. NO. 74]
to the terms of the Decree, on August 10, 2017, they made the
initial deposit of $100,000.00 into the Settlement Fund. See
Dkt. No. 75-2 at ¶ 4. Finally, they have not disputed that the
Consent

Decree

is

a

valid

decree

of

which

they

had

actual

knowledge. See Dkt. No. 76. The United States, therefore, has
satisfied its burden with regard to the first factor.
B.

The Consent Decree was in the United States’s favor.
Second, the United States must establish that the Consent

Decree

was

in

its

favor.

Ashcraft,

218

F.3d

at

301.

The

defendants do not dispute this factor. See Dkt. No. 76. The
Decree

unambiguously

orders

them

to

deposit

money

into

a

Settlement Fund to compensate persons harmed by their conduct
and to pay civil penalties to the United States to vindicate the
public interest. Further, it enjoins Gary Walden from engaging
in certain activities, including entering the premises of or
performing

management

responsibilities

at

any

of

the

subject

rental properties, and initiating or knowingly participating in
any direct personal contact with any current or past tenant. See
Dkt. No. 73 at 5-11. The United States, therefore, has satisfied
its burden with regard to the second factor.

8

UNITED STATES V. WALDEN, ET AL.

1:16CV42

MEMORANDUM OPINION AND ORDER GRANTING UNITED STATES’S
MOTION TO HOLD DEFENDANTS IN CIVIL CONTEMPT [DKT. NO. 74]
C.

The defendants knowingly violated the Consent Decree.
Third, the United States must establish that the defendants

knowingly violated the terms of the Consent Decree. Ashcraft,
218 F.3d at 301. The Decree required the defendants to deposit
an additional $400,000.00 into the Settlement Fund and to pay
$100,000.00 in civil penalties to the United States by January
15, 2018 (Dkt. No. 73 at ¶¶ 22, 33). When the defendants failed
to

make

these

outstanding

payments,

obligations

the

United

with

defense

States

discussed

counsel

and

these

Walden’s

guardian ad litem on numerous occasions (Dkt. No. 75-1).
The defendants do not dispute their failure to comply with
the clear and unequivocal terms of the Consent Decree. See Dkt.
No. 76. Nor do they dispute their constructive, if not actual,
knowledge of these violations. Indeed, they concede that they
are “fully aware of the[ir] obligations” under the Decree. Id.
at 1. Rather, they claim that a “range of factors outside of
their control” have prevented them from fulfilling their payment
obligations,

making

timely

performance

“impossible” (Dkt. No. 76 at 1-2).

9

under

the

Decree

UNITED STATES V. WALDEN, ET AL.

1:16CV42

MEMORANDUM OPINION AND ORDER GRANTING UNITED STATES’S
MOTION TO HOLD DEFENDANTS IN CIVIL CONTEMPT [DKT. NO. 74]
A party facing sanctions for civil contempt may assert the
defense of “a present inability to comply with the order in
question.” United States v. Rylander, 460 U.S. 752, 757 (1983)
(citations omitted) (emphasis in original). It is well settled,
however, that in raising this defense, it is the defendant who
bears the burden of production. Id. Thus, in order to purge
himself

of

civil

contempt,

a

defendant

must

affirmatively

produce evidence showing a present inability to comply with the
order in question. See United States v. Butler, 211 F.3d 826,
831 (4th Cir. 2000).
Courts have held that “[c]onclusory assertions of financial
inability . . . are insufficient to satisfy this burden.” S.E.C.
v. SBM Inv. Certificates, Inc., No. 1:06–CV–0866–DKC, 2012 WL
706999, *11 (D.Md. Mar. 2, 2012) (citations omitted). “Rather,
the [defendants] must show that they acted in good faith and
took all reasonable efforts to comply with the court’s order.”
Id. Moreover, “inability to comply is only a ‘complete defense’
if the party is unable to comply in any manner with a court’s
order.” First Mariner Bank v. Resolution Law Grp., P.C., No.
MJG-12-1133,

2014

WL

1681986,

at

10

*2

(D.

Md.

Apr.

28,

2014)

UNITED STATES V. WALDEN, ET AL.

1:16CV42

MEMORANDUM OPINION AND ORDER GRANTING UNITED STATES’S
MOTION TO HOLD DEFENDANTS IN CIVIL CONTEMPT [DKT. NO. 74]
(emphasis
they

added).

have

“[O]therwise,

undertaken

in

reasonable

order

and

to

good

demonstrate
faith

that

efforts

to

comply, [ ] the party must pay to the extent that [its] finances
would allow.” SBM Inv. Certificates, 2012 WL 706999, at

*11

(citing Loftus v. Se. Pa. Transp. Auth, 8 F.Supp.2d 464, 468
(E.D.Pa. 1998), aff’d, 187 F.3d 626 (3rd Cir. 1999)).
Here,

the

Beyond

merely

failed

to

defendants
asserting

have

their

affirmatively

failed

to

financial

produce

meet

their

inability,

evidence

of

burden.

they

their

have

“present

inability to comply with the order in question.” See generally
Dkt.

No.

defendant

76

at

1-3;

asserting

“impossible”

has

“the

see
that

also

Butler,

compliance

burden

of

211

with

producing

F.3d

at

court

831

order

evidence

that

(a
is
he

presently lack[s] the funds to comply”). They have submitted no
bank statements, account records, or other financial documents
tending to corroborate their purported inability to pay. Other
than pointing to an alleged inability “to obtain a loan secured
by

the

real

estate”

or

to

borrow

money

“from

any

private

sources,” Dkt. No. 76 at 2, they have produced no evidence that
they in good faith have made “all reasonable efforts to comply”

11

UNITED STATES V. WALDEN, ET AL.

1:16CV42

MEMORANDUM OPINION AND ORDER GRANTING UNITED STATES’S
MOTION TO HOLD DEFENDANTS IN CIVIL CONTEMPT [DKT. NO. 74]
with the Court’s Order. SBM Inv. Certificates, 2012 WL 706999,
at *11.
Significantly, the defendants concede that they own “more
than

$700,000.00

worth

of

property,”

which

could

be

sold

to

satisfy their payment obligations under the Consent Decree (Dkt.
No. 76 at 2). But they have not sold these properties because
Gary

Walden

properties

“intends
to

his

to

transfer

children.”

his

Id.

In

interest
the

face

in
of

[these]
their

obligations under the Consent Decree, they credulously submit
that a “forced sale” of the properties at below fair market
value

“would

only

punish

innocent

persons

not

party

to

the

Consent [Decree].” Id.
This

argument

is

unconvincing.

As

an

initial

matter,

obtaining fair market value for the sale of the defendants’ real
estate is not a condition of the Consent Decree. Fulfilling
payment obligations to the Settlement Fund and to the United
States, on the other hand, is “an unequivocal command.” See Dkt.
No. 73 at ¶¶ 22, 33. That the defendants might have to sell
properties at below fair market value does not vitiate their

12

UNITED STATES V. WALDEN, ET AL.

1:16CV42

MEMORANDUM OPINION AND ORDER GRANTING UNITED STATES’S
MOTION TO HOLD DEFENDANTS IN CIVIL CONTEMPT [DKT. NO. 74]
obligation to comply with the clear and unambiguous terms of the
Consent Decree.
Further,

as

the

United

States

emphasizes,

the

“innocent

persons” at issue in this case are the defendants’ former female
tenants and prospective tenants who have yet to be compensated
for

the

harms

they

suffered

as

a

result

of

Gary

Walden’s

conduct. Thus, the defendants have wholly failed to demonstrate
that they have undertaken reasonable and good faith efforts to
comply with the Consent Decree by “paying to the extent that
their

finances

would

allow.”

SBM

Inv.

Certificates,

2012

WL

706999, at *11.
Finally, the defendants’ contention that they did not have
“full

knowledge

or

appreciation

of”

the

supposed

financial

impediments to their compliance is specious. See Dkt. No. 76 at
1. All the parties to the Consent Decree negotiated and agreed
to

terms

that

clearly

contemplated

the

defendants

would

pay

monies into the Settlement Fund and to the United States by a
date certain. Having been intimately involved in the lengthy
negotiations
question

that

that

the

resulted

in

defendants

the
were

13

settlement,

it

is

well

of

their

aware

beyond
own

UNITED STATES V. WALDEN, ET AL.

1:16CV42

MEMORANDUM OPINION AND ORDER GRANTING UNITED STATES’S
MOTION TO HOLD DEFENDANTS IN CIVIL CONTEMPT [DKT. NO. 74]
financial circumstances at the time they obligated themselves to
the terms of the Consent Decree. For the same reasons, they also
have been fully aware of those obligations since that time.
The evidence is clear and convincing that the defendants
have

knowingly

failing

to

violated

deposit

the

terms

$400,000.00

of

into

the
the

Consent

Decree

Settlement

Fund

by
to

compensate aggrieved persons, and failing to pay $100.000.00 in
civil penalties to the United States, both by January 18, 2018
(Dkt. No. 73 at ¶¶ 22, 33). Further, they have wholly failed to
satisfy

their

burden

of

proving

the

defense

of

a

“present

inability to pay.” The United States, therefore, has satisfied
its burden with regard to the third Ashcraft factor.
D.

The United States has suffered harm due to violations of
the Consent Decree.
Finally, the United States must establish that it suffered

harm as the result of the defendants’ violations of the Consent
Decree.

Ashcraft,

218

F.3d

at

301.

According

to

the

United

States, without the additional $400,000.00 the defendants are
required
adequately

to

deposit
compensate

into

the

all

of

Settlement
the

victims

Fund,

it

harmed

cannot
by

the

defendants’ violations of the Fair Housing Act (Dkt. No. 75 at
14

UNITED STATES V. WALDEN, ET AL.

1:16CV42

MEMORANDUM OPINION AND ORDER GRANTING UNITED STATES’S
MOTION TO HOLD DEFENDANTS IN CIVIL CONTEMPT [DKT. NO. 74]
5). In addition to the fifteen (15) persons identified in the
Consent Decree, Dkt. No. 73 at App’x B, the United States is
investigating

whether

additional

aggrieved

persons

should

be

compensated from the Fund. See id. at 73; see also Dkt. No. 75-2
at ¶¶ 8-9. It asserts that, given the nature and extent of the
harm

inflicted

by

the

defendants,

the

$100.000.00

previously

deposited is insufficient to adequately compensate all aggrieved
persons

who

may

have

been

harmed

by

Gary

Walden’s

sexual

harassment, which occurred over a period of at least nine years
(Dkt. No. 75 at 5-6).
In addition, the United States contends that it has clearly
suffered harm because of the loss of resources it has had to
expend to enforce the Decree and prosecute this motion. See
Summerville v. Local 77, No. 1:06CV00719, 2008 WL 3983118, at *5
(M.D.N.C. Aug. 26, 2008). The defendants have neither disputed
nor otherwise responded to this contention. The United States,
therefore, has satisfied its burden as to the fourth factor.
IV.
In conclusion, for the reasons discussed, the Court GRANTS
the motion of the United States (Dkt. No. 74) and HOLDS the

15

UNITED STATES V. WALDEN, ET AL.

1:16CV42

MEMORANDUM OPINION AND ORDER GRANTING UNITED STATES’S
MOTION TO HOLD DEFENDANTS IN CIVIL CONTEMPT [DKT. NO. 74]
defendants in civil contempt. Furthermore, the Court ORDERS the
parties to submit briefs on the appropriate remedy in this case.
The United States shall file an opening brief no later than
March 15, 2019. The defendants shall respond by March 29, 2019.
The United States may file a reply no later than April 5, 2019.
The Court
Memorandum

DIRECTS

Opinion

and

the Clerk to transmit copies of this
Order

to

counsel

of

record

and

the

guardian ad litem.
DATED: March 4, 2019
/s/ Irene M. Keeley
IRENE M. KEELEY
UNITED STATES DISTRICT JUDGE

16