Garrett v. Coventry II DDR/Trademark Montgomery Farm, L.P. (In re White-Robinson)

• Decision Date: 06 February 2015
• Docket Number: No. 14–10525.,14–10525.
• Citation: 777 F.3d 792
• Parties: In the Matter of Nina WHITE–ROBINSON, Debtor. Mpatanishi Tayari Garrett; Tayari Law, P.L.L.C., Appellants v. Coventry II DDR/Trademark Montgomery Farm, L.P., Appellee.
• Court: U.S. Court of Appeals — Fifth Circuit

777 F.3d 792

In the Matter of Nina WHITE–ROBINSON, Debtor.

Mpatanishi Tayari Garrett; Tayari Law, P.L.L.C., Appellants

v.Coventry II DDR/Trademark Montgomery Farm, L.P., Appellee.

No. 14–10525.

United States Court of Appeals, Fifth Circuit.

Feb. 6, 2015.

Mpatanishi Tayari Garrett, Dallas, TX, pro se.

Juan Renteria, Jr., Renteria Law Firm, P.L.L.C., Dallas, TX, for Appellant.

Mark A. Goodman, Fox Rothschild, L.L.P., Michael Steven Rumac, David & Goodman, A.P.C., Dallas, TX, for Appellee.

Before Judges JOLLY, WIENER, and CLEMENT, Circuit Judges.

Opinion

PER CURIAM:

Appellants Mpatanishi Tayari Garrett (“Garrett”) and her law firm, Tayari Law, P.L.L.C. (“the firm”), appeal the bankruptcy court's contempt order (the “Contempt Order”), which held them in civil contempt for failing to pay sanctions imposed for prior misconduct. The district court affirmed the Contempt Order. We likewise AFFIRM.

FACTUAL AND PROCEDURAL BACKGROUND

We have considered this unseemly case once before. It involves Garrett's misconduct in her legal representation of debtor Nina White–Robinson (“White–Robinson”) during bankruptcy proceedings. We previously affirmed the bankruptcy court's two sanctions orders (the “Sanctions Orders”). First, the bankruptcy court sanctioned Garrett and her firm for discovery abuse, ordering them to pay $5,000 to appellee Coventry II DDR/Trademark Montgomery Farm, L.P. (“DDR”). Second, after a subsequent show-cause hearing, the bankruptcy court sanctioned Garrett for bringing a frivolous and procedurally deficient motion for contempt against DDR, ordering her to pay $20,000 to DDR. On November 13, 2012, the district court affirmed the Sanctions Orders. Finally, on January 2, 2014, we likewise affirmed the bankruptcy court's Sanctions Orders with a two-paragraph order, and the Supreme Court denied certiorari on October 6, 2014. In re White–Robinson, 551 F. App'x 121 (5th Cir.2014), cert. denied, ––– U.S. ––––, 135 S.Ct. 76, 190 L.Ed.2d 35 (2014).

In the interim, during the appeal of the Sanctions Orders, Garrett and her firm did not pay the ordered sanctions, even though they did not post a supersedeas bond or otherwise obtain a stay pending appeal. On December 18, 2012, DDR filed a motion for contempt. The bankruptcy court held a show-cause hearing in which Garrett appeared but did not present any evidence. On February 21, 2013, the bankruptcy court held Garrett and her firm in civil contempt, finding that they knew about the non-stayed Sanctions Orders but declined to pay them. The bankruptcy court ordered Garrett and her firm to pay DDR an additional $6,454.50, the expenses DDR incurred in attempting to enforce the Sanctions Orders. The Contempt Order also ordered them to pay DDR $100 for each additional day that they did not pay the sanctions.

Over six months later, on September 12, 2013, Garrett and her firm¹ filed an emergency motion for a stay with the district court, moving to stay “essentially all orders,” including the Sanctions Orders and Contempt Order. On September 20, 2013, the district court denied Garrett's motion to stay because she had not demonstrated why she failed to obtain a stay from the bankruptcy court. There is no indication in the record that Garrett subsequently filed another motion to stay the Sanctions Orders or the Contempt Order.

Finally, on March 25, 2014 (after we affirmed the Sanctions Orders), the district court affirmed the bankruptcy court's Contempt Order. Garrett has, predictably, appealed again, this time arguing that we should reverse the Contempt Order.

STANDARD OF REVIEW

“Like the district court,” we review “a bankruptcy court's findings of fact for clear error, and its legal conclusions de novo.” In re Bradley, 588 F.3d 254, 261 (5th Cir.2009). “A bankruptcy court's assessment of monetary sanctions for contempt is reviewed for abuse of discretion.” Id.

DISCUSSION

Garrett raises three main issues on appeal. First, she argues that the bankruptcy court lacked jurisdiction to issue the Contempt Order because it was not related to the bankruptcy and was issued while the Sanctions Orders were before us on appeal. Second, she argues that the Contempt Order violates the prohibition on imprisonment for a debt. Third, she argues that the Contempt Order was an abuse of the bankruptcy court's discretion. We deal with each issue in turn.

I. Jurisdiction

A bankruptcy court may issue civil contempt orders. In re Terrebonne Fuel & Lube, Inc., 108 F.3d 609, 612–13 (5th Cir.1997). There is no real dispute that the contempt order here was civil, and indeed it clearly was—its purpose was “to coerce compliance with a court order or to compensate another party for the contemnor's violation.” Id. at 612. That is, the $6,454.50 award was meant to reimburse DDR for having to seek enforcement of the Sanctions Orders, and the $100–per–day award was meant to coerce Garrett into paying the Sanctions Orders timely.

A bankruptcy court may exercise full judicial power only in core proceedings. In re Wood, 825 F.2d 90, 91 (5th Cir.1987) ; see also 28 U.S.C. § 157(b)(1) (giving bankruptcy court full jurisdiction over core matters); id. § 157(c)(1) (giving bankruptcy courts only recommendation authority over non-core matters that are merely “related to” a bankruptcy case). We hold that the bankruptcy court's issuance of the Contempt Order took place during such a core proceeding. A proceeding is core if it either arises under the Bankruptcy Code or “would have no existence outside of the bankruptcy” proceeding. Wood, 825 F.2d at 96–97. Here, the proceeding was core because holding a party in civil contempt for refusing to follow a bankruptcy court's valid and binding orders “would have no existence outside of the bankruptcy” proceeding. Again, an order of civil contempt is meant to coerce the contemnor into compliance or provide a remedy for the party injured by noncompliance. Terrebonne Fuel, 108 F.3d at 612. As such, an order of civil contempt is considered part of the underlying case. See In re Hipp, Inc., 895 F.2d 1503, 1517 (5th Cir.1990) (“[C]ivil contempts generally have been viewed as part of the underlying case.”). Thus, the civil contempt order was issued as part of the bankruptcy case itself, making it a core proceeding that “would have no existence outside of the bankruptcy.”

Moreover, the Contempt Order here falls within one of the statutorily-enumerated examples of core proceedings because it was a “matter[ ] concerning the administration of the estate.” 28 U.S.C. § 157(b)(2). The Contempt Order concerned the orderly administration of White–Robinson's estate—namely, her attorney's compliance with federal bankruptcy rules and the orders of the bankruptcy court. See In re Memorial Estates, Inc., 950 F.2d 1364, 1370 (7th Cir.1991) (holding that sanction for attorney's misconduct during bankruptcy case was core proceeding, without considering whether misconduct occurred during core proceeding, in part because misconduct itself “concern[ed] the administration of the estate” (internal alteration in original)); Leonard v. Wessel, 118 B.R. 243, 248 (E.D.Pa.1990) (holding that malpractice claims against debtor's counsel alleging “professional conduct not compatible with obligations imposed by provisions of the bankruptcy law itself—provisions relating to the conduct of practitioners before the bankruptcy court—” concerned “the administration of the estate”). We find unpersuasive Garrett's claim that the Contempt Order was non-core and unrelated to the bankruptcy case merely because White–Robinson had been discharged from bankruptcy. The bankruptcy court issued its Sanctions Orders to help promote the proper administration of the estate, and therefore the later Contempt Order to enforce the Sanctions Orders still “concern[ed] the administration of the estate.”²

In the alternative, Garrett argues that the bankruptcy court could not issue its Contempt Order while the Sanctions Orders were being appealed to this court. This argument is clearly foreclosed by our precedent. Unless a bankruptcy court's ruling is stayed pending appeal, that court retains jurisdiction to engage in proceedings to enforce its own rulings. United States v. Revie, 834 F.2d 1198, 1205 (5th Cir.1987). Here, Garrett did not obtain a stay of the Sanctions Orders pending appeal. Accordingly, the bankruptcy court retained jurisdiction to enforce the Sanctions Orders through any appropriate means, including a civil contempt order. See Resolution Trust Corp. v. Smith, 53 F.3d 72, 76–77 (5th Cir.1995) (“Until the judgment has been properly stayed or superseded, the district court may enforce it through contempt sanctions.” (internal quotation marks and alteration omitted)).

II. Imprisonment for a Debt

Garrett next argues that the Contempt Order was improper because it violates 28 U.S.C. § 2007 (“ § 2007 ”), the federal prohibition on imprisonment for a debt. That section provides in relevant part that “[a] person shall not be imprisoned for debt on a writ of execution or other process issued from a court of the United States in any State wherein imprisonment for debt has been abolished.” Id. § 2007(a). The Sanctions Orders were issued from a federal court in Texas, and the Texas Constitution provides that “[n]o person shall ever be imprisoned for debt.” Tex. Const. art. I, § 18. Thus, because the Contempt Order allegedly threatens Garrett with imprisonment for her failure to pay the Sanctions Orders, Garrett argues that the Contempt Order violates § 2007.

The most intuitive response to this argument is that the Contempt Order did not imprison anyone and did not realistically threaten anyone with the risk of imprisonment. But Garrett argues that one of our cases could be read to imply that, in Texas, § 2007 prohibits all civil contempt orders for failure to pay a debt because imprisonment is a possible remedy for civil contempt. In Pierce v. Vision Investments, Inc., we applied § 2007 analysis to a civil contempt order, even though the order did not...