Bavelis v. Doukas (In re Bavelis)

519 B.R. 707
CourtUnited States Bankruptcy Court, S.D. Ohio
DecidedSeptember 26, 2014
DocketBankruptcy No. 10-58583; Adversary No. 10-2508
StatusPublished
Cited by4 cases

This text of 519 B.R. 707 (Bavelis v. Doukas (In re Bavelis)) is published on Counsel Stack Legal Research, covering United States Bankruptcy Court, S.D. Ohio primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Bavelis v. Doukas (In re Bavelis), 519 B.R. 707 (Ohio 2014).

Opinion

MEMORANDUM OPINION AND ORDER (A) HOLDING TED DOUKAS IN CIVIL CONTEMPT AND (B) ESTABLISHING PROCEDURES FOR DETERMINING DAMAGES

JOHN E. HOFFMAN, JR., Bankruptcy Judge.

I. Introduction

George Bavelis, the Chapter 11 debtor in possession and the plaintiff in this adversary proceeding, contends that one of the defendants, Ted Doukas, knowingly violated an order of the Court that prohibited him from ti-ansferring certain assets and that required him to provide Bavelis unfettered access to certain documents. In direct contravention of the requirements imposed by this order, Doukas obstructed Bavelis’s access to the documents. Among other things, when Bavelis asked Doukas for copies of the documents during discovery, Doukas lied and said he had no responsive documents. He then doubled down on his contempt, transferring assets [709]*709the order prohibited him, from transferring. Having concluded — for the reasons detailed below — that Doukas engaged in contemptuous conduct, the Court establishes procedures for determining the amount of damages Bavelis may recover on behalf of his bankruptcy estate.

II. Jurisdiction and Constitutional Authority

The Court has jurisdiction to hear and determine this matter pursuant to 28 U.S.C. §§ 157 and 1334 and the general order of reference entered in this district. This is a core proceeding. See 28 U.S.C. § 157(b)(2)(A) and (0).

The Court also has the constitutional authority to hear and determine the matter. See In re Brown, 511 B.R. 843, 848 (Bankr.S.D.Tex.2014) (holding that bankruptcy courts retain the constitutional authority to impose sanctions for contempt of a court order after Stern v. Marshall, — U.S. —, 131 S.Ct. 2594, 180 L.Ed.2d 475 (2011)); In re Green, No. 12-13410, 2014 WL 1089843, at *1 (Bankr.N.D.Ohio Mar. 19, 2014) (same); Schermerhorn v. CenturyTel, Inc. (In re SkyPort Global Commc’ns), No. 08-36737-H4-11, 2013 WL 4046397, at *41 (Bankr.S.D.Tex. Aug. 7, 2013) (“Stem does not limit this Court’s constitutional authority to enter an order enforcing the Court’s own prior orders .... ”).

III. Procedural History

On July 20, 2010 (“Petition Date”), Ba-velis filed a voluntary petition for relief under Chapter 11 of the Bankruptcy Code. On October 20, 2010, Bavelis commenced this adversary proceeding and filed a motion for a preliminary injunction (Adv.Doc. 2). Bavelis served Plaintiffs First Set of Requests for Production of Documents to Each Defendant (“First Document Request”) (Bavelis Ex. 4) the next day. After holding a telephonic status conference, the Court entered an agreed scheduling order (“Scheduling Order”) (Adv.Doc. 42) providing that Doukas and the other defendants “shall produce their responses and objections to [the First Document Request], including all documents produced in response thereto, so that they are received in the offices of [Bavelis’s] counsel by 10:00 a.m. on Friday, December 3, 2010.” Scheduling Order ¶ 2.

The Court conducted a hearing on the motion for a preliminary injunction on December 14, 2010. After the hearing recessed and the parties conferred, they presented a draft agreed order regarding the motion for a preliminary injunction, and the Court entered an order granting preliminary injunctive relief on December 15, 2010 (“Injunction”) (Adv.Doc. 78).

This matter is before the Court on Ba- • velis’s two motions requesting that the Court enter an order directing Doukas to appear and show cause why he should not be held in civil contempt for violating the Scheduling Order and the Injunction. Those motions are located at Adv. Doc. 234 . (“First Show Cause Motion”) and Adv. Doc. 277 (“Second Show Cause Motion” and, together with the First Show Cause Motion, “Show Cause Motions”). Doukas filed a response to the First Show Cause Motion (Adv.Doc. 239) (“First Doukas Response”), and Bavelis filed a reply memorandum in support of that motion (“First Bavelis Reply”) (Adv.Doc. 241). Likewise, Doukas filed a response to the Second Show Cause Motion (Adv.Doc. 279) (“Second Doukas Response”), and Bavelis filed a reply memorandum in support of that motion (“Second Bavelis Reply”) (Adv.Doc. 281).

After the Show Cause Motions were filed, the Court entered an order (“Show Cause Order”) (Adv.Doc. 424) directing Doukas to appear and show cause why he should not be held in contempt and sane-[710]*710tioned for the acts and omissions described in the Show Cause Motions and in the First Bavelis Reply and the Second Bavel-is Reply.1 The Court conducted a hearing at which Doukas testified (“Show Cause Hearing”). At the Show Cause Hearing, Doukas moved for a directed judgment at the close of Bavelis’s case, but the Court denied that motion. See Hearing Transcript (“Tr.”), Adv. Doc. 511 at 86-112.

During the Show Cause Hearing, Ba-velis’s Exhibits 2 through 19, 21 through 23, and 47 were admitted into evidence.2 Tr. at 77-86. At Doukas’s request, the Court took judicial notice of Adv. Doc. 327 (Defendant/Third-Party Defendant RPM Recoveries, Inc.’s Motion to Compel Compliance with Injunction Order and its exhibits), and at Bavelis’s request the Court took judicial notice of Adv. Doc. 340 (Memorandum in Opposition of Plaintiff George A. Bavelis to Defendant/Third-Party Defendant RPM Recoveries, Inc.’s Motion to Compel Compliance with Injunction Order and its exhibits). Tr. at 119-20. At the request of the parties, the Court also took judicial notice of the exhibits attached to the First Show Cause Motion, the First Doukas Response, the First Bavelis Reply, the Second Show Cause Motion, the Second Doukas Response and the Second Bavelis Reply. Tr. at 85-86. Finally, the Court took judicial notice of the docket in Bavelis’s bankruptcy case, including the claims register, and the docket in this adversary proceeding, as well as any other documents Doukas offered as exhibits that are on the Court’s dockets that were not withdrawn during the Show Cause Hearing (Doukas Exhibits Q, V and W). Tr. at 113-19.

IV. Background

Several years before the Petition Date, Bavelis and one of his business partners, Mahammad A. Qureshi, formed four limited liability companies, including GMAQ, LLC (“GMAQ”) and FLOVEST, LLC (“FLOVEST”), for the purpose of investing in gas stations, office buildings and mixed-use real estate developments. Ba-velis and Qureshi each owned one-half of GMAQ. In addition, Bavelis was the manager and indirect part owner of yet another company (FLOHIO, LLC) that owned one-half of FLOVEST; the other one-half owner of FLOVEST was one of Qureshi’s companies, MAQ Management, Inc. In time, business disputes between Bavelis and Qureshi developed. See Bavelis v. Doukas (In re Bavelis), 490 B.R. 258 (Bankr.S.D.Ohio 2013) (“Bavelis J”.)

Doukas then entered the picture. As Bavelis I sets forth in much greater detail, after Bavelis and Doukas became friends in early 2009, Doukas offered to help resolve the Bavelis-Qureshi disputes favorably to Bavelis.

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Related

Bavelis v. Doukas
S.D. Ohio, 2021
Bavelis v. Doukas (In re Bavelis)
535 B.R. 228 (S.D. Ohio, 2015)

Cite This Page — Counsel Stack

Bluebook (online)
519 B.R. 707, Counsel Stack Legal Research, https://law.counselstack.com/opinion/bavelis-v-doukas-in-re-bavelis-ohsb-2014.