In Re Sanctions for Failure to Comply With a Court Order

58 B.R. 560, 1985 U.S. Dist. LEXIS 22493
CourtDistrict Court, D. Connecticut
DecidedFebruary 19, 1985
DocketMisc. Civ. H 85-14 (JAC), H 83-62 (JAC)
StatusPublished
Cited by2 cases

This text of 58 B.R. 560 (In Re Sanctions for Failure to Comply With a Court Order) is published on Counsel Stack Legal Research, covering District Court, D. Connecticut primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
In Re Sanctions for Failure to Comply With a Court Order, 58 B.R. 560, 1985 U.S. Dist. LEXIS 22493 (D. Conn. 1985).

Opinion

*563 RULING ON ORDER TO SHOW CAUSE REGARDING FAILURE TO COMPLY WITH A COURT ORDER

JOSÉ A. CABRANES, District Judge:

The question presented is whether a law firm shall be sanctioned for having knowingly refused for more than a year to comply with an acknowledgedly lawful order of the United States Bankruptcy Court, allegedly because of a belief that the order was in conflict with a subsequent state court order. 1

Introduction

This court on August 28, 1984, found that the refusal of the Connecticut Bank & Trust Company (“CBT”) “to comply with [the] acknowledgedly lawful order [of April 21, 1983] of the United States Bankruptcy Court [to provide certain documents to the court-appointed trustee in bankruptcy] ... constitute[d] a contempt of the lawful orders of a federal court of competent jurisdiction,” Certified Official Transcript of Hearing of August 28, 1984 (filed Aug. 29, 1984) (“8/28/84 Tr.”) at 46, granted the trustee’s motion for an order of contempt, see id. at 46-49 (statement of court’s grounds for granting trustee’s motion for order of contempt), 2 and imposed a daily fine on the contemnor until it had complied in full with the discovery order. The order of August 28,1984 was stayed for ten days “to permit CBT, which claim[ed] it [was] ready, willing and able to comply with the court’s orders ... to comply in full, in which case no such penalty [would] be imposed.” Id. at 46-47.

Also on August 28,1984, the court granted the trustee’s application for reasonable attorney’s fees incurred in connection with the preparation and argument of his mo *564 tion for an order of contempt, based upon an undisputed affidavit of the trustee’s counsel in support of his claim. Id. at 50-51. See Rule 37, Fed.R.Civ.P.; Bankruptcy Rules 9014, 7037; 4A Moore’s Federal Practice 1137.02[10.-1] at 37-47 to 37-50 (2d ed.1984).

Having disposed of the contempt question and having granted the trustee’s application for reasonable attorney’s fees, the court thereupon ordered CBT’s counsel, the Hartford law firm of Updike, Kelly & Spel-lacy, P.C. (“Updike, Kelly”), and the member of the firm who had submitted the firm’s papers on the trustee’s motion for an order of contempt, to show cause why the court should not issue an order requiring that Updike, Kelly itself

pay a fine to the Clerk of the Court in the amount of $2,000 for its failure to comply or to seek compliance by its client of a lawful discovery order of a federal court and for its apparently intentional obstruction of the effective and efficient administration of the court’s business.

8/28/84 Tr. at 51. See id. at 47-49 (set forth in the margin at note 2) (court’s rejection of a series of Updike, Kelly arguments to justify failure to obey federal court order of April 21, 1983). See also Order (filed Aug. 29, 1984) (reciting Order to Show Cause and scheduling hearing); Certified Official Transcript of Hearing of September 6, 1984 (“9/6/84 Tr.”) (filed Sept. 17, 1984) at 3 (restating background of the order to show cause hearing).

A hearing on the court’s order to show cause was held on September 6, 1984, and Updike, Kelly has submitted three memo-randa in opposition to the imposition of sanctions.

Factual Background

On April 21, 1983, Judge Robert L. Kre-chevsky of the United States Bankruptcy Court for the District of Connecticut entered an order in Bankruptcy Case No. 205-5-81-00254 (Bridgeport seat of court), pursuant to which CBT was ordered to

deliver forthwith to Richard Belford, the Trustee herein, or to his attorney, copies of all banking records that [CBT] has in its possession in connection with accounts maintained at [CBT] by the debt- or.

The order was entered with the consent of Updike, Kelly, acting as CBT’s counsel. See 9/6/84 Tr. at 42-43.

On April 22, 1983, the debtor 3 filed a notice of appeal to the District Court from Judge Krechevsky’s order. 4 This appeal was docketed as Civ. No. H 83-376 (JAC). By order of May 6, 1983 in Misc.Civ.No. H 83-62 (JAC), the undersigned, before whom all cases in the District Court involving the debtor had been consolidated, directed that all matters then pending in the Bankruptcy Court involving the debtor be transferred from the Bankruptcy Court to this court. Therefore, as of May 6,1983, this court had jurisdiction of the appeal of the Bankruptcy Court’s order, Civ.No. H 83-376, as well as the matter underlying the appeal. 5

On May 9, 1983, Updike, Kelly appeared in the Superior Court of the State of Connecticut on behalf of CBT in an action brought by CBT against a corporation alleged to have a significant relationship to the debtor in the bankruptcy case. See Transcript of Hearing of May 9, 1983 in Connecticut Bank & Trust Company v. 658 Ridge Road, Inc., et al., No. 36468 (Superior Court, Middlesex Judicial District) (“State Tr.”), appended to Memorandum In Opposition to An Order of Con *565 tempt Against Updike, Kelly & Spellacy, P.C. (filed Aug. 31, 1984) (“Updike, Kelly Memorandum I”). At the May 9, 1983 hearing, all concerned — the Updike, Kelly attorney, the attorney for the defendant in the state suit and the state court judge presiding over the discovery disputes in that case — were fully aware of the related proceedings in the United States Bankruptcy Court and that court’s discovery order of April 21, 1983. See State Tr. at 3, 7, 8, 9, 10, 20, 23.

Following a series of oral rulings from the bench by the state court judge directing, inter alia, that certain information be conveyed by the defendant to CBT, the defendant’s counsel sought a protective order to preclude the release “to any other party” of the information to be conveyed by the defendant to CBT. Id. at 23. The attorney from Updike, Kelly thereupon reminded the state court judge that “we have been ordered by the [Bankruptcy [Cjourt to turn over all records the bank has with respect to this defendant.” Id. at 23-24. There then ensued the following colloquy:

[ATTORNEY:] ... If you are telling me I should not obey the [Bjankruptcy [Cjourt—
THE COURT: The information supplied to you pursuant to the order shall not be voluntarily turned over to any individual person or corporation, excluding any court of competent jurisdiction which has jurisdiction over any matter between these parties.
[ATTORNEY:] So if the court orders me to turn it over to them I can turn it over to the bankruptcy court?
THE COURT: Yes.

Id. at 24. 6

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Cite This Page — Counsel Stack

Bluebook (online)
58 B.R. 560, 1985 U.S. Dist. LEXIS 22493, Counsel Stack Legal Research, https://law.counselstack.com/opinion/in-re-sanctions-for-failure-to-comply-with-a-court-order-ctd-1985.