Trade Well International v. United Central Bank
2015 U.S. App. LEXIS 2100
| 7th Cir. | 2015Background
- Trade Well (Pakistani company) leased furnishings and fixtures to Dells Estate LLC for a hotel; Dells defaulted on a mortgage held by United Central Bank (the Bank), which foreclosed and acquired the hotel with the leased items still inside.
- Trade Well sued the Bank in federal court for replevin and damages; Trade Well sought inspection and moved to stay a bank sale so it could remove items; the court allowed removal of personal property but left certain fixtures (e.g., Jacuzzis, remodeling) in place.
- After failing to retrieve property, Trade Well (through NY attorney Maurice Salem, admitted pro hac vice) filed a county "Notice of Lien" at the Sauk County Register of Deeds; the document resembled a Wisconsin lis pendens more than a construction lien.
- The Bank moved to strike the Notice, revoke Salem’s pro hac vice admission, and seek sanctions; the district court held Salem in contempt, revoked his pro hac vice status, fined him $500, referred him to state bars, and barred pro hac vice admission for three years.
- Salem appealed; the Seventh Circuit considered (1) appellate jurisdiction and (2) whether the contempt finding and sanctions were justified.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Appellate jurisdiction over contempt order | Salem appealed; contempt order immediately appealable by a nonparty | Bank argued appeal was premature/nonfinal | Court: Jurisdiction exists; contempt adjudications are immediately appealable and appeal became effective with final judgment |
| Characterization of sanctions (civil vs criminal) | Salem treated fines as civil; revocation and bar punitive | Bank treated sanctions as contempt/inherent-power sanctions | Court: Characterization unclear but unnecessary to decide because sanctions invalid under either label |
| Validity of the Notice (lien vs lis pendens) and right to file | Salem/Trade Well: document was a lis pendens-like filing to protect fixtures and other real-property interests; Register accepted filing; filing was authorized/statutorily required if real-property claims exist | Bank: Document was an improper construction lien or an ineffective lis pendens because not prepared by a WI bar member/authenticated; interfered with sale | Court: Notice resembled lis pendens and Trade Well’s claims included fixtures (real property); filing was not ground for contempt; mistakes/poor drafting do not prove bad faith |
| Sanctions, contempt, and pro hac vice revocation | Salem: No court order violated; no bad faith; sanctions unjustified | Bank: Filing abused process and pro hac vice status, warranting contempt and sanctions | Court: Vacated contempt finding and sanctions — no specific court decree was violated, no bad-faith shown, and inherent-power sanctions were unwarranted |
Key Cases Cited
- United States v. Dowell, 257 F.3d 694 (7th Cir. 2001) (nonparty may immediately appeal contempt adjudication)
- Mañez v. Bridgestone Firestone N. Am. Tire, LLC, 533 F.3d 578 (7th Cir. 2008) (civil contempt requires an existing court decree with an unequivocal command)
- Grove Fresh Distribs., Inc. v. John Labatt, Ltd., 299 F.3d 635 (7th Cir. 2002) (standards for civil contempt enforcement)
- International Union, United Mine Workers of Am. v. Bagwell, 512 U.S. 821 (1994) (distinguishing civil from criminal contempt)
- Chambers v. NASCO, Inc., 501 U.S. 32 (1991) (courts’ inherent powers must be exercised with restraint)
- Law v. Siegel, 134 S. Ct. 1188 (2014) (inherent sanctioning powers subordinate to statutory directives)
- Grochocinski v. Mayer Brown Rowe & Maw, LLP, 719 F.3d 785 (7th Cir. 2013) (sanctions require bad faith; negligence insufficient)
- United States v. Britton, 731 F.3d 745 (7th Cir. 2013) (procedural protections required for criminal contempt)