Frank Mayor v. Edward Wolkowitz
697 F. App'x 542
| 9th Cir. | 2017Background
- Cinevision International, Inc. filed for bankruptcy and a trustee sought turnover of certain property held by Frank Mayor and Cindy Gunadi.
- The Trustee sued in the Bankruptcy Court; Judge Vincent Zurzolo granted summary judgment for the Trustee ordering turnover of the property.
- The Trustee then initiated a civil contempt proceeding under 11 U.S.C. § 105(a) against Mayor and Gunadi for violating the automatic stay by not turning over the property prior to the summary judgment.
- A different Bankruptcy Judge found Mayor and Gunadi in civil contempt and ordered them to pay the Trustee’s counsel fees and costs incurred in the adversary proceeding.
- Mayor and Gunadi appealed, arguing the Bankruptcy Court used the wrong burden of proof and failed to make required findings under Knupfer v. Lindblade (In re Dyer).
- The Bankruptcy Appellate Panel affirmed; this appeal followed to the Ninth Circuit which reviewed legal issues de novo and factual findings for clear error.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Proper burden of proof for civil contempt | Trustee: contempt appropriate based on court findings | Mayor/Gunadi: contempt requires clear and convincing proof, not preponderance | Court: appellants correct; clear and convincing standard required; remand to apply it |
| Required findings to support contempt under Knupfer | Trustee: relied on prior summary judgment findings to support contempt | Mayor/Gunadi: court must make specific findings that contemnors knew of the stay and acted intentionally | Court: Bankruptcy Court failed to make Knupfer findings (knowledge and intentionality); remand for explicit findings and record citations |
Key Cases Cited
- Christensen v. Tucson Estates, Inc. (In re Tucson Estates, Inc.), 912 F.2d 1162 (9th Cir. 1990) (standard of review for bankruptcy appeals)
- Federal Trade Comm’n v. Affordable Media, LLC, 179 F.3d 1228 (9th Cir. 1999) (standard for reviewing factual findings)
- Anderson v. Liberty Lobby, Inc., 477 U.S. 242 (1986) (preponderance standard on summary judgment explained)
- Knupfer v. Lindblade (In re Dyer), 322 F.3d 1178 (9th Cir. 2003) (civil contempt requires clear and convincing proof and findings of knowledge and intentional violation)