Andrews v. Holloway

256 F.R.D. 136, 2009 U.S. Dist. LEXIS 20188, 2009 WL 690670
CourtDistrict Court, D. New Jersey
DecidedMarch 12, 2009
DocketCivil Action No. 95-1047 (JBS)
StatusPublished
Cited by11 cases

This text of 256 F.R.D. 136 (Andrews v. Holloway) is published on Counsel Stack Legal Research, covering District Court, D. New Jersey primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Andrews v. Holloway, 256 F.R.D. 136, 2009 U.S. Dist. LEXIS 20188, 2009 WL 690670 (D.N.J. 2009).

Opinion

OPINION

SIMANDLE, District Judge.

The Court is presented with a motion by Judgment Plaintiffs’ (“Plaintiffs”) to hold Judgment Defendant Gregory Holloway (“Defendant”) in contempt of Court pursuant to Rule 37(b), Fed.R.Civ.P. [Docket Item 538]. For almost twelve years, Defendant has successfully avoided paying a judgment owed to Plaintiffs by obstructing Plaintiffs’ efforts to obtain, through discovery, information about his financial affairs. Defendant’s conduct culminated in this Court’s final discovery order of March 5, 2008, in which the Court gave him a final mandate to provide the financial information he has long obscured, permitting the Plaintiffs to obtain his further deposition testimony upon a long list of relevant topics. The Court finds, for the reasons described below, that Defendant’s deliberately evasive and untruthful answers in response to the Court-ordered questioning were contemptuous of this Court’s Order and warrant his incarceration for civil contempt until that contempt is purged.

I. BACKGROUND

These proceedings have a long and inglorious history, consuming much time, energy, and expense on the part of the parties and necessitating court intervention for the mundane (where particular depositions should be conducted) as well as the trivial (when depositions should end in the evening).

Andrews v. Holloway, No. 95-1047, 1996 WL 495148, at *4 (D.N.J. Aug. 27, 1996) [hereinafter Holloway II ].

The present action, long in its post-judgment phase, has now passed its fourteenth birthday. It has been over twelve years since the Court lamented the Herculean efforts expended in this litigation, and as of this date it remains, for all practical purposes, unresolved. Plaintiffs are twenty-seven individuals who invested millions of dollars in a limited partnership, Continental Rare Coin Fund I, Ltd. (“CRCF I”), in response to a 1988 prospectus issued by Defendant, who was the sole shareholder of CRCF I and served as the firm’s investment advis- or. In 1995, after learning that the partnership had no value, Plaintiffs brought suit against Defendant, along with several others entangled with CRCF I, including his wife, Laura Andre, and his parents.1 Plaintiffs asserted claims under the Racketeering Influenced Corrupt Organization Act (“RICO”), 18 U.S.C. § 1962, as well as common law claims of fraud. On June 20,1997, as part of a settlement, Defendant agreed to an entry of judgment against him, in the amount of $6,097,015.00 [Docket Item 371],

[139]*139To date, Defendant has paid no part of this judgment, which now amounts to over nine million dollars. (Pis. Joint Certification (“Joint Cert.”) ¶¶ 1-2.) In fact, he testified that when he agreed to the entry of this judgment he did not intend to pay any of it. (Pis. Ex. B, June 13, 2008 Dep. at 27.) Apparently to that end, he has maintained throughout his post-judgment depositions that he is unemployed, and has no income, assets, bank accounts, or credit cards in his name. (Pis. Ex. L, May 28, 2008 Dep. at 7, 14, 25-26, 31, 53-55.) Instead, he claims that he has been and continues to be supported by his wife and his parents, Lee and Car-layne Holloway. (Pis. Ex. N, June 22, 2008 Dep. at 35.) It is Plaintiffs’ theory that Defendant has fraudulently transferred or concealed assets with the help of his wife and parents and that their assets are, in fact, Defendant’s assets, and that he has maintained a lavish lifestyle in Palm Beach, Florida and Ocean City, New Jersey that cannot be explained through his elliptical testimony.

Plaintiffs’ efforts to procure payment from Defendant have resulted in many Court orders over the years, due in large part to

Defendant’s and his family’s2 resistance to post-judgment discovery. Defendant has repeatedly made clear that he would not appear for depositions without a specific Court order. As early as September, 2003, this Court found that Defendant “was unresponsive [during depositions] to most questions about his financial dealings with [his wife] Ms. Andre” for he “continually refused to answer questions about Ms. Andre’s wealth or claimed that he did not know or was unable to remember anything pertinent about Ms. Andre’s financial dealings.”3 Andrews v. Holloway, No. 95-1047, 2009 WL 690670, *5, 2003 U.S. Dist. LEXIS 16961, at *16 (D.N.J. Sept. 29, 2003) [hereinafter Holloway III ]. On this basis, the Court permitted broad questioning of Ms. Andre, but still unable to obtain the necessary information from her, Plaintiffs continued to seek answers from Defendant.

A series of discovery disputes and delay by Defendant led to this Court’s most recent, and final, discovery order.4 On December 27, 2007, after Defendant unilaterally can-celled a scheduled deposition, Plaintiffs filed a motion for Writ of Capias Ad Satisaeien-[140]*140dum and asked the Court to order Defendant’s arrest and incarceration until he provided full and complete testimony as to the true nature and extent of his assets. Rather than grant Plaintiffs’ motion, the Court provided Defendant with a final opportunity to avoid custody and entered the Order in question. This Court’s Order of March 5, 2008, required Defendant to appear “to be deposed under oath for an undetermined period of time to allow the Judgment Plaintiffs’ attorneys to conduct the deposition of the Judgment Defendant concerning all of the assets, individuals and entities that are set forth on Schedule ‘A’ which is attached hereto and ma[d]e a part hereof.”5 The Court specifically ordered Defendant to “provide testimony concerning the income and assets of his wife, Laura Andre and his mother, Carlayne Holloway” and further to “produce all books, records and documents that the Judgement Plaintiffs shall request of him.” This Order mandated his obligation to give truthful and complete answers to all relevant questions within the seventy subjects defined in Schedule A, and to produce all documents relevant to those subjects that Plaintiffs request.

Defendant appeared for four days of depositions, on May 28, 2008, May 29, 2008, June 12, 2008, and June 13, 2008. He did not appear on May 27, 2008, the first scheduled day of depositions. During his depositions he gave answers to many questions, except for those he claimed were duplicative, but many of his answers were that he did not know or could not remember the information requested from him. He further produced just two documents, his 1998 and 1999 joint tax returns, claiming he doesn’t have any additional requested documents, though they may exist. Further, though parties agreed to continue depositions on June 18, 2008, Defendant refused to attend.

In response to Defendant’s conduct during post-judgment discovery, Plaintiffs brought the present motion to hold Defendant in contempt.6 On February 25, 2009, the Court convened the hearing upon its order to show cause why Mr. Holloway should not be held in contempt of Court,7 heard argument, and reserved decision.

III. DISCUSSION

A. Contempt

Disobedience of a court order compelling a deponent to appear at a deposition and answer relevant questions is indeed a serious matter. Rule 37(b)(1), Fed.R.Civ.P., makes this crystal-clear, providing:

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Bluebook (online)
256 F.R.D. 136, 2009 U.S. Dist. LEXIS 20188, 2009 WL 690670, Counsel Stack Legal Research, https://law.counselstack.com/opinion/andrews-v-holloway-njd-2009.