Lois Whitcraft and Phillip Offill appeal from a civil contempt order issued by the district court in the underlying proceeding. We affirm in part and vacate in part the district court’s contempt order.
I.
On July 2, 2007, the Securities and Exchange Commission (“SEC”) sued certain individual and entities, including Jeffrey Bruteyn, son of Appellant Whitcraft and client of Appellant Offill, an attorney, for securities fraud. The SEC also joined two other corporations partially owned or controlled by Bruteyn as relief defendants: American Eagle Acceptance Corporation (“American Eagle”) and Hess Financial Corporation (“Hess Financial”). The same day, the district court issued a temporary restraining order freezing Bruteyn’s assets (“freeze order”). The freeze order provided in pertinent part that:
Defendant and Relief Defendants, their officers, agents, employees, servants, attorneys and all persons in active concert or participation with them, who receive actual notice of this order by personal service or otherwise, are restrained and enjoined from, directly or indirectly, making any payment or expenditure of funds ... and from assigning!,] conveying, transferring, encumbering, disbursing, dissipating, selling, hypothecating, or concealing any assets, monies, or other property owned by or in the actual or constructive possession of defendants or Relief Defendants.
SEC v. Amerifirst Funding, Inc.,
[a]ll persons, including defendants and Relief Defendants, and their officers, agents, servants, employees, brokers, facilitators, attorneys, and all persons in active concert or participation with them who receive actual notice of [the] order by personal service or otherwise [to] ... promptly deliver to the Receiver all Receivership Assets in the possession or under the control of any one or more of them[.] No separate subpoena shall be required.
Id.
On July 5, 2007, Bruteyn and several of his business associates and personal friends met at the office of Offill, Bruteyn’s lawyer, to discuss how Bruteyn would access funds for his living expenses and legal fees. Prior to this meeting, Bruteyn had directed United Financial Markets, Inc. (“United Financial”) to obtain stock in InterFinancial Holding Corp. (“InterFinancial”) and distribute 95% of the proceeds from the resale of this stock to Hess Financial, a company owned and managed by Bruteyn. At the time of the meeting, United Financial’s account contained some $495,000 in profits from the sale of InterFinancial stock and still owed Hess over $430,000 as stipulated under the purchase agreement. United Financial had not yet been named a defendant or a relief defendant at the time of the meeting. Bruteyn suggested that the money in United Financial’s account be transferred to Hess Financial and be made available
Bruteyn then proposed selling a Picasso 1 painting hanging in his bedroom to United Financial in exchange for $500,000. Offill initially expressed concern that the Picasso was covered by the freeze order but eventually opined that the transaction would be legal as Bruteyn maintained that the painting was owned by his mother, Lois Whit-craft (“Whitcraft”). Bruteyn phoned his mother and obtained her permission to sell the painting. That same day, United Financial purchased the Picasso for $431,161. The money was wired into Whitcraft’s account and placed at Bruteyn’s disposal.
On July 25, 2007, the SEC amended its complaint to include five additional relief defendants, including United Financial and InterFinancial. The receivership order and the freeze order were subsequently amended to include these additional relief defendants.
On September 24, 2007, the receiver and the SEC filed a motion to show cause seeking to hold Bruteyn, Whitcraft, Ronald Whitcraft (Bruteyn’s stepfather), and Offill in civil contempt for violating the receivership and freeze order through the transaction engineered on July 5, 2007. 2 The district court held an evidentiary hearing on the civil contempt motion in January 2008. The court heard expert testimony from an art dealer regarding the nominal value of the Picasso print, testimony from the purported contemnors, and testimony from financial experts with respect to the economic viability and structure of the corporations involved in the transaction. Following the evidentiary hearing, on February 1, 2008, the district court found Bruteyn, Whitcraft, and Offill in contempt. The court held that there was clear and convincing evidence that Whitcraft and Offill knowingly aided and abetted Bruteyn in violating the freeze order. The district court declined to hold Bruteyn’s stepfather in contempt. Whit-craft and Offill alone appeal. 3
II.
We review contempt orders and sanctions imposed thereunder for an abuse of discretion.
United States v. City of Jackson,
As the district court noted, “[a] movant in a civil contempt proceeding bears the burden of establishing by clear and convincing evidence 1) that a court order was in effect, 2) that the order required certain conduct by the respondent, and 3) that the respondent failed to comply with the court’s order.”
Martin v. Trinity
III.
The district court held that Offill had violated the freeze order, which prohibited Bruteyn (and his officers, agents, servants, employees, and attorneys or other persons who were in active concert or participation with him) from “directly or indirectly!] making any payment or expenditure of funds” and “from assigning!,] conveying, transferring, encumbering, disbursing, dissipating, selling, hypothecating, or concealing any assets, monies, or other property owned by or in the actual or constructive possession” of Bruteyn or the relief defendants. Offill challenges the district court’s holding that the receiver proved by “clear and convincing evidence” that (1) that a court order was in effect, (2) that the order required certain conduct by Offill, and (3) that the Offill failed to comply with the court’s order.
The district court did not abuse its discretion in finding Offill in civil contempt. As to the first element of contempt, the parties do not dispute that at the time the Picasso was sold to United Financial on July 5, 2007, the freeze order was in effect. As to the second element, the order, by its terms, required certain conduct by Offill, who was Bruteyn’s lawyer at the time of the transaction. The freeze order clearly states that it binds persons who “receive actual notice of this order by personal service or otherwise” including the defendant Bruteyn’s “attorneys.” On July 3, 2007, Offill accepted service of the SEC’s complaint, which included the freeze order, on behalf of Bruteyn. Offill therefore had actual notice of the freeze order. Beyond being bound by the order by virtue of his role as Bruteyn’s attorney, the district court also found that Offill was also a person in “active concert or participation” with Bruteyn. Offill— with full knowledge of the freeze order’s terms—was an active participant in discussions about how to get funds to Bruteyn, approved of the sale of the Picasso, and Offill’s office served as the place to consummate the sale. The final element of civil contempt—that the respondent failed to comply with the freeze order—was also satisfied. Offill failed to comply with court order by assisting Bruteyn in conveying and transferring “assets” and “monies” that were in Bruteyn’s “actual or constructive possession.” The Picasso was in Bruteyn’s actual possession at the time of the sale—it hung in his bedroom in the home he used as his residence.
4
Thus, the Pi
As to Whitcraft, pursuant to her own testimony, the district court found that she “admitted] that she was aware of the Freeze Order before the July 5, 2007 sale of the Picasso.”
Ameñfirst Funding,
IV.
For the foregoing reasons, the district court’s order holding Offill and Whitcraft in civil contempt is AFFIRMED IN PART with regard to Phillip Offill, and VACATED IN PART and REMANDED for further proceedings not inconsistent with this opinion with regard to Lois Whitcraft.
Notes
. Evidence developed at the district court hearing established that the Picasso was not an original, but rather a reproduction print of relatively modest value. Lois Whitcraft maintained that she believed the Picasso was authentic.
. The receiver further asserted a fraudulent transfer claim and maintained that the sale violated the Texas Uniform Fraudulent Transfer Act ("TUFTA”). Because the court reached its finding without resorting to TUF-TA, it did not address the parties' TUFTA arguments or whether TUFTA can be used to set aside a fraudulent transfer in a contempt proceeding.
. The SEC and the receiver were both parties to the contempt action, but the SEC sought to hold only Bruteyn in contempt. Because Bruteyn does not challenge the contempt ruling against him, the SEC is not a party to this appeal.
. The home was owned by Bruteyn’s stepfather, who visited the home a few times a year
. In addition we hold that the district court did not err in finding that the funds held in United Financial's account which were used to purchase the Picasso were in the constructive possession of Bruteyn, thus providing an alternative theory for why the sale of the Picasso was a violation of the freeze order. Under Texas law, constructive possession requires "intent and capability to maintain control and dominion” over the object in question.
Mehan v. Wamco XXVIII, Ltd.,
. The district court did not hold, nor does the receiver contend, that Whitcraft was aware of the specifics of the freeze order or knew the freeze order applied to assets which were not owned by Bruteyn.