Electronic Realty Associates, Inc. v. Gomez, 67734

• Decision Date: 12 March 1993
• Docket Number: No. 67734,67734
• Citation: 848 P.2d 458,18 Kan.App.2d 122
• Parties: ELECTRONIC REALTY ASSOCIATES, INC., Appellee, v. Carole Sandow GOMEZ, Deborah Chesla, Steven Spies and SCG, Inc., Appellants.
• Court: Kansas Court of Appeals

Page 458

848 P.2d 458

18 Kan.App.2d 122

ELECTRONIC REALTY ASSOCIATES, INC., Appellee, v. Carole Sandow GOMEZ, Deborah Chesla, Steven Spies and SCG Inc., Appellants.

No. 67734.

Court of Appeals of Kansas.

March 12, 1993.

Syllabus by the Court

1. By the very nature of a contempt proceeding, the decision of guilt or innocence of an accused rests in the sound discretion of the trial court before whom the matter is pending. When a trial court has exercised that discretion and its discretion has been challenged by appeal, the sole duty of the appellate court is to determine whether the record reveals such an abuse of discretion as to warrant a reversal of its action.

2. Contempt of court may be either direct or indirect. Direct contempt is committed during the sitting of the court or of a judge in chambers, in his or her presence, while all other contempts are indirect.

3. Prior to 1978, Kansas statutes required a distinction between criminal and civil contempt. K.S.A. 20-1204 was used for criminal proceedings and required that criminal contempt be treated as a criminal hearing. K.S.A. 20-1207 provided a separate procedure for civil contempt. The Kansas courts were forced to distinguish the types of contempt to determine which statute controlled the proceeding.

4. In 1978, the Kansas Legislature repealed both K.S.A. 20-1204 and K.S.A. 20-1207. In place of those statutes, the legislature passed K.S.A. 20-1204a. The procedures outlined in this statute apply to both criminal and civil contempt.

5. A motion for contempt under K.S.A. 20-1204a is construed strictly against the movant. The procedures of the statute must be strictly construed.

6. Under K.S.A. 20-1204a(a), the party seeking a contempt order should move the court for an order directing the person alleged to be in contempt to appear before the court and show cause why that person is not in contempt. This motion must state the time and date of the hearing, have proper service, and be accompanied by a copy of the affidavit. The affidavit and order serve as the notice of the nature of the hearing.

7. Where a party has acted in willful and deliberate disregard of reasonable and necessary orders of the court, the application of a stringent sanction is fully justified and should not be disturbed.

8. The language of K.S.A. 20-1204a provides the district court broad powers in handling contempt. The statute states "If the court determines that a person is guilty of contempt such person shall be punished as the [trial] court shall direct."

9. A citation for contempt is an action against a specific person requiring all of the due process criteria. It is well settled that a person cannot be held in contempt if he or she does not have knowledge of the order or notice of the proceedings.

Joseph M. Backer and Daniel J. Markowitz, of McDowell, Rice & Smith, Overland Park, for appellants.

Edward M. Dolson, of Smith, Gill, Fisher & Butts, Kansas City, MO, and Daniel J. Langin, of Smith, Gill, Fisher & Butts, Overland Park, for appellee.

Before ELLIOTT, P.J., RULON, J., and DAVID S. KNUDSON, District Judge, Assigned.

RULON, Judge:

Carole Sandow Gomez, Deborah Chesla, Steven Spies, and SCG, Inc., defendants, appeal an order of the district court finding them in criminal contempt for violating an order restraining them from filing suit in California state court against Electronic Realty Associates, Inc., plaintiff. The defendants argue the district court abused its discretion and did not give proper notice of the nature of the contempt proceeding. We affirm.

Essentially we must decide two issues: (1) whether the district court abused its discretion when designating defendants' prohibited action as indirect criminal contempt, imposing fines, and assessing defendants the cost of plaintiff's attorney fees; and (2) whether the defendants received proper notice of the nature of the contempt proceedings to satisfy due process requirements.

The essential facts are not disputed and are as follows:

The defendants are corporate officers of the defendant corporation SCG. Under the SCG corporation, the defendants sold California real estate through a membership agreement with plaintiff. A forum selection clause in the membership agreement named Johnson County, Kansas, as the legal venue of any action between defendant SCG and plaintiff.

During the course of the business relationship, the defendants notified plaintiff that they intended to sue plaintiff in California state court. Plaintiff petitioned the Johnson County District Court for a restraining order to enforce the forum selection clause and to prevent the defendants from filing suit in California. The Johnson County District Court issued a temporary restraining order on November 9, 1991, and set a hearing date to determine if the restraining order should become permanent.

The defendants filed a motion to dismiss the restraining order, arguing that the Kansas court did not have personal jurisdiction. The Johnson County District Court denied this motion, stating that the forum selection clause provided jurisdiction over the defendants. The defendants then failed to appear at the hearing regarding the restraining order and the district court entered a default judgment making the temporary restraining order permanent.

Eventually, the defendants filed suit for breach of contract against plaintiff in California state court. Upon plaintiff's motion the California state court dismissed that action based on the Kansas district court's restraining order. Neither defendants nor plaintiff dispute that the California suit violated the Kansas restraining order.

Later, under K.S.A. 60-909, plaintiff moved the Kansas district court for a contempt judgment. This motion sought $20,000 in "civil contempt fines" per defendant and $30,000 in damages based on the plaintiff's attorney fees.

The district court ultimately found the defendants "guilty of indirect criminal contempt" under K.S.A. 20-1204a and assessed the defendants $34,618.41 for plaintiff's attorney fees and fined each defendant $5,000. The defendants appeal, arguing the district court improperly used what defendants refer to as the "criminal contempt statute."

Standard of Review

"By the very nature of a contempt proceeding, the decision of guilt or innocence of an accused rests in the sound discretion of the trial court before whom the matter is pending. When a trial court has exercised that discretion and its discretion has been challenged by appeal, the sole duty of the appellate court is to determine whether the record reveals such an abuse of discretion as to warrant a reversal of its action." Edmiston v. First Nat'l Bank of Holcomb, 242 Kan. 13, 15, 744 P.2d 829 (1987) (citing Fleming v. Etherington, 227 Kan. 795, 610 P.2d 592 [1980].

A trial court has broad power in a contempt proceeding regarding the willful violation of restraining orders. See UARCO, Inc. v. Osborne, 224 Kan. 163, 166, 578 P.2d 266 (1978). "Judgments in contempt proceedings rest within the sound discretion of the trier of facts and will not be disturbed on appellate review unless an abuse of judicial discretion clearly appears from the record." Hensley v. Board of Education of Unified School District, 210 Kan. 858, 862, 504 P.2d 184 (1972).

Contempt of Court

"Contempt of court may either be direct or indirect, criminal or civil. Direct contempt is committed during the sitting of the court or of a judge in chambers, in [his or her] presence, while all other contempts are indirect." Edmiston, 242 Kan. at 15, 744 P.2d 829 (citing K.S.A. 20-1202); see K.S.A. 20-1201 and K.S.A. 20-1203. Here, the contempt occurred when defendants filed the California lawsuit, violating the Kansas district court's restraining order. Defendant's contempt occurred outside of the courtroom and is indirect contempt.

The distinction between criminal and civil contempt has been discussed in Kansas case law. "Civil contempt is the failure to do something ordered by the court for the benefit or advantage of another party to the proceeding." Edmiston, 242 Kan. at 15, 744 P.2d 829 (citing State, ex rel. v. Bissing, 210 Kan. 389, 395, 502 P.2d 630 (1972)). A civil contempt proceeding is remedial and coercive and is "brought for the enforcement of private rights and remedies." Hendrix v. Consolidated Van Lines, Inc., 176 Kan. 101, Syl. p 1, 269 P.2d 435 (1954). Civil contempt is a remedial or corrective action meant to coerce a party into acting. Goetz v. Goetz, 181 Kan. 128, 137, 309 P.2d 655 (1957).

Criminal contempt can occur in either a civil or criminal proceeding. Hendrix, 176 Kan. at 109, 269 P.2d 435. Criminal contempt is intended to punish conduct that is "in disrespect of a court or its processes, or which obstructs the administration of justice." 176 Kan. 101, Syl. p 2, 269 P.2d 435. A criminal contempt is "conduct directed against the dignity and authority of a court," and a contempt judgment is punitive and meant to vindicate the authority of the court. In re Sanborn, 208 Kan. 4, 14-15, 490 P.2d 598 (1971).

Generally, if the contempt in question is a violation of an order made on behalf of one party, the contempt will be considered civil. However, if "the contempt consists in doing a forbidden act, injurious to the opposite party, the contempt may be considered criminal." Hendrix, 176 Kan. at 109-10, 269 P.2d 435.

Here, the district court designated the defendants' contempt as criminal. The defendants argue there are factors indicating the contempt in question was actually civil. According to defendants, the contempt dealt with the violation of a restraining order and with the private rights of plaintiff. The defendants assert that because the plaintiff was successful in its efforts to dismiss the California litigation, there is no need for a civil contempt finding and no need to coerce the defendants into acting.

Arguably, K.S.A. 60-909 supports the conclusion that a contempt judgment for...