Witt v. Jay Petroleum, Inc.

Decision Date21 March 2012
Docket NumberNo. 38S02–1110–CV–608.,38S02–1110–CV–608.
Citation964 N.E.2d 198
PartiesJohn WITT, HydroTech Corp., and Mark Shere, Appellants/Plaintiffs, v. JAY PETROLEUM, INC. and Jack R. James, Appellees/Defendants.
CourtIndiana Supreme Court

OPINION TEXT STARTS HERE

Mark E. Shere, Indianapolis, IN, Attorney for Appellant, John Witt and HydroTech Corp.

Rosemary G. Spalding, Allison Wells Gritton, Spalding & Hilmes, PC, Indianapolis, IN, Attorneys for Appellee, Jack R. James.

George M. Plews, Christopher J. Braun, Stephanie T. Eckerle, Josh S. Tatum, Plews Shadley Racher & Braun LLP, Indianapolis, IN, Attorneys for Appellee, Jay Petroleum, Inc.

On Petition to Transfer from the Indiana Court of Appeals, No. 38A02–0912–CV–1290

DICKSON, Justice.

John Witt, HydroTech Corp., and attorney Mark Shere were held in contempt of court for violating the terms of a temporary restraining order. We granted transfer and affirm the trial court.

This contempt holding arises from protracted litigation in a lawsuit over the costs of an environmental cleanup.1 John Witt purchased a property that had for many years been the site of a gasoline filling station. Witt never used the property as a gas station, but the underground storage tanks (“USTs”) that had supplied the former gas pumps remained in the ground on the property. When it was discovered that one or more of the tanks had leaked petroleum chemicals into the ground, Witt notified the Indiana Department of Environmental Management (“IDEM”) and contracted with HydroTech to remove the USTs and perform the cleanup in accordance with IDEM's standards. Witt also retained attorney Mark Shere to pursue claims against the previous landowners for damage to the property and the costs associated with the cleanup. Jay Petroleum, Inc. (Jay Petroleum) and Jack James were among the defendants named in that suit.

Several months into the suit, and after an initial discovery conference, Jay Petroleum sent a letter to Shere's office, addressed to Witt, requesting seven days advance notice of the removal of the USTs. The removal of the USTs was particularly relevant to the litigation because the testing of the exposed earth around and beneath the USTs could reveal the nature of the environmental damage and, perhaps, which of the defendants would be liable. The window for gathering the necessary soil samples was relatively short and contemporaneous to the exposing of the dirt surrounding each UST. Consequently, Jay Petroleum sought notice of the USTs' removal in order to have its own environmental consultant present when HydroTech extracted the USTs. Shere, however, was out of town and did not see the letter until June 24, 2008. Shere called Jay Petroleum's attorney, Christopher Braun, and Braun returned the call the following day, but the two did not speak directly until the morning of June 26, 2008, at which time the removal of the USTs was well underway. The conversations between Shere and Braun left the parties at an impasse. Jay Petroleum insisted on having its environmental consultant on site, but Witt would not agree unless Jay Petroleum revealed what soil testing it planned to conduct or agreed to stipulations regarding the samples that would limit Jay Petroleum's options at trial. The communication between the parties at this point was less than civil, and neither would yield. Nevertheless, Jay Petroleum sent its environmental consultant to the site, but Witt refused to allow the consultant onto the property. At the end of the day, Jay Petroleum informed Witt that it would seek a temporary restraining order (“TRO”) and preliminary injunction to stop the removal of the USTs.

The following morning, Jay Petroleum filed its motion for a TRO. Braun presented argument to the trial court in-person and Shere, on behalf of Witt, participated in the TRO hearing via phone. At the conclusion of the hearing the judge informed them that the court was granting Jay Petroleum's motion. The TRO entered by the court declared, in relevant part:

The Court hereby orders, adjudges and decrees that John [Witt] ..., and all persons acting in concert and participation with [him], including the ... environmental consultant, HydroTech, Inc., are now enjoined and restrained until further order of this Court as follows, from:

1. from [sic] conducting UST removal, soil excavation, or other environmental investigation and remediation activities on the Property until the Court can schedule a preliminary injunction hearing to [sic] at which all parties will be provided notice of Jay Petroleum's request that its consultant, QEPI, shall be allowed to observe the UST removal activities and be allowed to collect split samples[.]

Order Granting Def. Jay Petroleum's V. Mot. for TRO, Appellants Witt's and Shere's App'x at 50–51. Immediately after the hearing, Shere contacted Witt and HydroTech and informed them that the court had entered a TRO enjoining work on the site until a preliminary injunction hearing could be held. During these conversations, Shere and HydroTech discussed whether the open UST pits should be backfilled. HydroTech expressed its concern that the site would be unsafe unless the holes were backfilled. Shere and HydroTech each interpreted the TRO to permit backfilling of the open UST pits. Additionally, Shere and HydroTech decided to continue to obtain further sampling on one of the exposed UST pits. Shere told HydroTech that he thought this action was permissible under the terms of the TRO, but Shere directed that the samples taken that day should not be tested without permission from the trial court. HydroTech took the remaining samples and commenced backfilling the holes by 11 a.m. At approximately 1:45 p.m., a Jay County Sheriff's deputy served a copy of the TRO at the site. After the deputy departed, HydroTech continued to backfill the holes until approximately 3 p.m. at which time two Sheriff's deputies arrived and instructed that all work should cease.

On July 2, 2008, at the outset of the hearing on the preliminary injunction, Jay Petroleum filed the motion for contempt of court. During the hearing, both parties introduced evidence regarding the motion for contempt despite the trial court's admonition that the hearing was limited to the preliminary injunction. The trial court issued the preliminary injunction but specifically deferred ruling on the motion for contempt. A hearing on the motion for contempt was held November 9, 2009, at which all parties declined the trial court's invitation to offer any further evidence. Counsel instead relied on the evidence presented at the preliminary injunction hearing in their briefs and arguments before the court. The trial court held Witt, HydroTech, and Shere in contempt and held them jointly and severally liable for $108,487.32 in costs and attorneys' fees.

On appeal, Witt and Shere (a) challenge the propriety of the trial court's TRO and modified preliminary injunction and (b) contend that the trial court abused its discretion in ruling on the contempt motion and in determining the sanction imposed. HydroTech also appeals, claiming that the trial court abused its discretion by holding it in contempt because it relied on Shere for its understanding of the TRO.

A party that is willfully disobedient to a court's order may be held in contempt of court. City of Gary v. Major, 822 N.E.2d 165, 170 (Ind.2005). The order must be “clear and certain” in its requirements. Id. It is soundly within the discretion of the trial court to determine whether a party is in contempt, and we review the judgment under an abuse of discretion standard. Id. at 171. We will reverse a trial court's finding of contempt only if there is no evidence or inference therefrom to support the finding.” Id. Witt and Shere contend that the trial court's finding of contempt was based upon a “cold record” and thus that we should review the finding de novo. We disagree. [C]ontempt of court involves disobedience of a court which undermines the court's authority, justice, and dignity.” Id. at 169 (citing Hopping v. State, 637 N.E.2d 1294, 1297 (Ind.1994)). The trial court has the inherent power to “maintain [ ] its dignity, secur[e] obedience to its process and rules, rebuk[e] interference with the conduct of business, and punish[ ] unseemly behavior.” Id. (citing State v. Shumaker, 200 Ind. 623, 640–41, 157 N.E. 769, 775 (1927)). Crucial to the determination of contempt is the evaluation of a person's state of mind, that is, whether the alleged contemptuous conduct was done willfully. Id. at 170 (“In order to be held in contempt for failure to follow the court's order, a party must have willfully disobeyed the court order.”); In re Perrello, 260 Ind. 26, 29, 291 N.E.2d 698, 700 (1973) (“The willful disobedience of a court order can constitute indirect ... contempt. However, the act must be done willfully and with the intent to show disrespect or defiance.” (citations omitted)); Meyer v. Wolvos, 707 N.E.2d 1029, 1031 (Ind.Ct.App.1999) (“When a person fails to abide by a court's order, that person bears the burden of showing that the violation was not willful.”). The determination of whether to find a party in contempt permits the trial court to consider matters which may not, in fact cannot, be reflected in the written record. The trial court possesses unique knowledge of the parties before it and is in the best position to determine how to maintain its “authority, justice, and dignity” and whether a party's disobedience of the order was done willfully.

Witt and Shere assert that the TRO was issued “under an incorrect legal standard” and that this “moots” the finding of contempt for violating its terms. Appellants Witt's and Shere's Br. at 31. We disagree. An order of the court is only unenforceable when the court lacked jurisdiction.2 If, in the valid exercise of its jurisdiction, a court issues an erroneous order, that order must be obeyed. Major, 822 N.E.2d at 169–70. “The only remedy from an erroneous order is appeal and...

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