Garrett v. Coventry II DDR/Trademark Montgomery Farm, L.P. (In Re White-Robinson)
777 F.3d 792
| 5th Cir. | 2015Background
- Garrett and her law firm failed to pay sanctions imposed for prior misconduct in White-Robinson bankruptcy proceedings.
- Bankruptcy court sanctioned Garrett and the firm $5,000 for discovery abuse and later $20,000 for a frivolous contempt motion; district court affirmed both sanctions.
- During appeal of the sanctions, Garrett did not post a stay or supersedeas bond and did not pay the sanctions.
- Bankruptcy court then held Garrett and her firm in civil contempt, ordering $6,454.50 to DDR and $100 per day for nonpayment.
- Garrett sought a stay from the district court, which denied it; no further stay was pursued in the record.
- Garrett appeals the Contempt Order, arguing lack of jurisdiction, § 2007 imprisonment prohibition, and abuse of discretion.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Jurisdiction of contempt order in core proceedings | Garrett: order not core and not related to bankruptcy. | Garrett: court may enforce its orders during appeal; contempt was core. | Contempt order deemed core and enforceable during appeal. |
| Imprisonment for debt under § 2007 and Texas constitutional ban | Garrett: § 2007 prohibits imprisonment for any debt; contempt could threaten imprisonment. | DDR sought monetary sanctions; no imprisonment occurred or was threatened; § 2007 not violated. | Civil contempt that does not imprison does not violate § 2007. |
| Abuse of discretion in sanctions | Garrett: sanctions were excessive; due process and equal protection concerns; lack of financial inquiry. | Sanctions were appropriate to coerce payment; Garrett had opportunity to present evidence and did not provide financial inability defense. | No abuse of discretion; sanctions were reasonable and properly enforced. |
Key Cases Cited
- In re Terrebonne Fuel & Lube, Inc., 108 F.3d 609 (5th Cir. 1997) (civil contempt designed to coerce compliance or compensate a party)
- In re Wood, 825 F.2d 90 (5th Cir. 1987) (core proceedings include matters arising under Bankruptcy Code)
- United States v. Revie, 834 F.2d 1198 (5th Cir. 1987) (stay of judgment; bankruptcy court may enforce its rulings pending appeal)
- Resolution Trust Corp. v. Smith, 53 F.3d 72 (5th Cir. 1995) (enforcement of judgments pending appeal; contempt authority)
- Pierce v. Vision Invs., Inc., 779 F.2d 302 (5th Cir. 1986) (§ 2007 analysis; civil contempt for debt may be constrained)
- Stern v. Marshall, 131 S. Ct. 2594 (2011) (Supreme Court on bankruptcy, constitutional implications)
- Rylander, 460 U.S. 757 (1983) (burden to plead inability to pay in civil contempt)
- Byrom, 316 S.W.3d 787 (Tex. App.—Tyler 2010) (Texas caselaw on inability to pay and sanctions)