In re Reed
| Decision Date | 15 May 1981 |
| Docket Number | 80-00082.,Bankruptcy No. 80-01785 |
| Parties | In re Bob Landy REED, dba the Old Firehouse Restaurant No. 1, aka Bob L. Reed and Bob Reed; and Carol P. Reed, aka Carol Reed, aka Carol P. Rodriguez, Carol Rodriguez and Mrs. Bob L. Reed, Debtors. In re Richard Earl HUBBARD, Debtor. |
| Court | United States Bankruptcy Courts. Tenth Circuit. U.S. Bankruptcy Court — District of Utah |
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George M. McCune, Provo, Utah, for debtors Reed et al.
Mark F. Robinson, Provo, Utah, for respondents, Todd Bona, Holly Broadhead, Norman Broadhead, Betty Quinn, Minnie Sparton.
Blaine Ferguson, Salt Lake City, Utah, for debtor Hubbard.
Dennis L. Draney, Roosevelt, Utah, for respondent, Uintah Basin Telephone Association.
Judith Boulden, Salt Lake City, Utah, for herself as trustee.
These cases are consolidated to consider issues concerning the contempt authority of this Court. Both ask how to categorize civil versus criminal contempt. Both ask whether creditors who knew of the bankruptcy, but who may not have received notice of the automatic stay,1 may be held in contempt for violating the stay, and whether the order announcing the stay is sufficiently definite and precise to trigger a citation for contempt. Both wrestle with the question of remedies for contempt. No party in either case has argued any procedural error. The focus, therefore, is the scope and relief under the contempt power as applied to transgressions of the automatic stay. All respondents are found in civil contempt and ordered to make reparation to debtors upon the following analysis.
Debtors, Bob and Carol Reed, doing business as The Old Firehouse Restaurant No. 1, filed their petition under Chapter 7 on September 12, 1980. The order for the first meeting of creditors and notice of the automatic stay were mailed to most parties in interest on September 19, but through inadvertence, were not sent to respondents until October 9.
Respondents, who sold the restaurant to debtors, and who are therefore creditors of the estate, were concerned about food spoilage and the resulting smell (T. 51, Is. 3-16). They contacted the trustee, obtained a key from him, and visited the premises on October 12. While unsure whether they had permission to remove property ), they nevertheless loaded several garbage cans, plastic bags, and containers full of fish, flour, pickles, onions, and dressings and drove to debtors' residence. Respondent Minnie Spatton and her grandson knocked at the back door. Carol Reed answered. Spatton said, and dropped one sack of garbage, letting it break and spill open on the porch ). Carol and her mother-in-law, who was staying with the Reeds, then watched from a window while respondents dumped and spread garbage on the driveway and front lawn.
The Court was apprised of these circumstances and issued an order to show cause to respondents on October 14. The order was served on October 15. Respondents filed an "Objection and Traverse to Affidavit in Support of Order to Show Cause In Re Contempt" dated October 30. A hearing was held on October 31, and the Court took the matter under advisement. Additional facts pertinent to the ruling will be set forth below.
The contempt power inheres in courts; it is necessary to insure obedience to their commands. See, e.g., Shillitani v. United States, 384 U.S. 364, 370, 86 S.Ct. 1531, 1535, 16 L.Ed.2d 622 (1966); Ex Parte Robinson, 19 Wall. 505, 510, 22 L.Ed. 205 (1873); United States v. Askew, 584 F.2d 960, 962 (10th Cir. 1978). It was early determined that bankruptcy courts, as courts of equity, even without statutory authorization, possessed this power. See, e.g., Boyd v. Glucklich, 116 F. 131 (8th Cir. 1902). And, indeed, history suggests that, absent statutory delimitation, it may be difficult to contain. See, e.g., Nye v. United States, 313 U.S. 33, 61 S.Ct. 810, 85 L.Ed. 1172 (1941).1a
The contempt power under the Code2 is expressed in 11 U.S.C. Section 105(a) which authorizes the issuance of "any order, process, or judgment that is necessary or appropriate to carry out the provisions of this title," and 28 U.S.C. Section 1481 which confers the "powers of a court of equity, law, and admiralty." Bankruptcy courts, however, may not punish criminal contempts committed outside their presence or warranting imprisonment.2a
These provisions are an expansive departure from Section 41(a) of the Bankruptcy Act, former 11 U.S.C. Section 69(a), which tolerated use of the contempt power only in specified instances.3 Section 41(a) was superseded, in part, by Rule 920, Fed.R. Bankr.P., which disallowed fines in excess of $250 and provided for the certification of these and contempts warranting imprisonment to the district court.4 Indeed, Sections 105 and 1481, read together, are on their face broader not only than Section 41(a) and Rule 920 but also than 18 U.S.C. Section 401 which governs contempt proceedings in other federal courts.5 Moreover, Section 105 is coextensive with the new jurisdiction of bankruptcy courts, 2 Collier on Bankruptcy, ¶ 105.01 at 105-1 (15th ed. 1980), which in turn surpasses the jurisdiction of other federal courts.6
The intrinsic breadth of the contempt power, however has been questioned on a number of grounds. Speaking philosophically, some have argued that contempts should not be punishable, "for if they arose from madness, it was to be pitied; if from levity, to be despised; and if from malice, to be forgiven." Patterson, On Liberty of Speech and Press, 18 (1939). Others have said that "respect by compulsion may be a contradiction in terms," and that obedience should be won through "moral rightness" rather than "artificial might." Goldfarb, The Contempt Power, 10 (1963).
On a more practical note, there is concern that contempt, as the law of kings, and wielded by judges who are men, may too often be exercised to vindicate a mistaken sense of judicial supremacy rather than the public good. After all, "contemptuous conduct, though a public wrong, often strikes at the most vulnerable and human qualities of a judge's temperament." Bloom v. Illinois, 391 U.S. 194, 202, 88 S.Ct. 1477, 1482, 20 L.Ed.2d 522 (1968). And "men who make their way to the bench sometimes exhibit vanity, irascibility, narrowness, arrogance, and other weaknesses to which human flesh is heir." Sacher v. United States, 343 U.S. 1, 12, 72 S.Ct. 451, 456, 96 L.Ed. 717 (1952).7 The joinder of such men with a power at once "unbridled" and "liable to abuse" may be unpropitious to say the least. Bloom v. Illinois, supra, 391 U.S. at 202, 88 S.Ct. at 1482.
The power, therefore, "must be narrowly confined lest it become an instrument of tyranny." Fisher v. Pace, 336 U.S. 155, 163, 69 S.Ct. 425, 428, 93 L.Ed. 569 (1949) (J. Douglas, dissenting opinion). Contempt opinions are tireless in their admonitions to assure "alert self-restraint," In re McConnell, 370 U.S. 230, 233, 82 S.Ct. 1288, 1290, 8 L.Ed.2d 434 (1962), and use of "the least possible power adequate to the end proposed." In re Michael, 326 U.S. 224, 227, 66 S.Ct. 78, 79, 90 L.Ed. 30 (1945).
Recent decisions have rehearsed the pruning of the contempt power in federal court, beginning with the Act of 1831 which "narrowly confined" and "substantially curtailed" the power to punish contempt summarily. Nye v. United States, supra, 313 U.S. at 47-48, 61 S.Ct. at 815. This history is traced in Bloom v. Illinois, supra, 391 U.S. at 202-206, 88 S.Ct. at 1482-1485, which concludes: "This course of events demonstrates the unwisdom of vesting the judiciary with completely untrammeled power to punish for contempt, and makes clear the need for effective safeguards against that power's abuse." Id. at 207, 88 S.Ct. at 1485.
In short, Cooke v. United States, 267 U.S. 517, 539, 45 S.Ct. 390, 395, 69 L.Ed. 767 (1925).
The starting point for delineating the scope of this power is determining whether the contempt is civil or criminal. Next, the necessity of notice as a condition to finding contempt must be posed. Finally an appropriate sanction must be found.
Whether the contempt is civil or criminal is a threshold issue. Several consequences flow from this categorization. Most obviously, if the contempt is criminal, since it was not committed in the Court's presence, it cannot be punished here and the certification procedures of Rule 920 must be followed. Moreover, criminal contempts are tried under the auspices of Rule 42, Fed.R. Crim.P.,8 and depending on whether petty or serious in character, may involve the right to trial by jury. See Bloom v. Illinois, supra.9
Classification of contempts is, in many instances, an improbable task. They " Gompers v. Buck Stove & Range Co., 221 U.S. 418, 441, 31 S.Ct. 492, 498, 55 L.Ed. 797 (1911) (citation omitted). It is at once "the proteus of the legal world, assuming an almost infinite diversity of forms," Moskovitz, "Contempt of Injunctions, Civil and Criminal," 43 Col. L.Rev. 780 (1945), and "sui generis — neither civil actions nor prosecutions for offenses, within the ordinary meaning of those terms." Myers v. United States, 264 U.S. 95, 103, 44 S.Ct. 272, 273, 68 L.Ed. 577 (1924).10 Its...
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