In re Residential Capital, LLC, Case No. 12–12020 (MG)

• Decision Date: 12 July 2017
• Docket Number: Case No. 12–12020 (MG)
• Citation: 571 B.R. 581
• Parties: IN RE: RESIDENTIAL CAPITAL, LLC, et al., Debtors.
• Court: U.S. Bankruptcy Court — Southern District of New York

571 B.R. 581

IN RE: RESIDENTIAL CAPITAL, LLC, et al., Debtors.

Case No. 12–12020 (MG)

United States Bankruptcy Court, S.D. New York.

Signed July 12, 2017

OFFICE OF THE UNITED STATES TRUSTEE, U.S. Federal Office Building, 201 Varick Street, Room 1006, New York, New York 10014, By: Andrew D. Velez–Rivera, Esq.

MEMORANDUM OPINION SUPPORTING THE ENTRY OF ORDER GRANTING THE UNITED STATES TRUSTEE'S MOTION FOR CIVIL CONTEMPT

MARTIN GLENN, UNITED STATES BANKRUPTCY JUDGE

Pending before the Court is the United States Trustee's (the "U.S. Trustee") Motion for Entry of Civil Contempt Order Against Chaledeeannka Deborah Ann Williams Goyens–Bell Eberwein ("Goyens") (the "Motion," ECF Doc. # 10391). Accompanying the Motion is a Memorandum of Law (the "Memo," ECF Doc. # 10391–1), and the Declaration of Andrew D. Velez–Rivera (the "Velez–Rivera Decl.," ECF Doc. # 10391–2). At a hearing on June 29, 2017 (the "Hearing"), the Velez–Rivera Declaration was admitted into evidence. Goyens did not appear at the Hearing. On July 5, 2017, the Court entered an order (the "Contempt Order," ECF Doc. # 10409) granting the Motion. The Court stated at the June 29, 2017 hearing that an Opinion would follow further explaining the basis for the Contempt Order.

The U.S. Trustee fulfills an important role in bankruptcy proceedings, helping to oversee the administration of bankruptcy cases. Here, the U.S. Trustee diligently performed this responsibility in helping to oversee the administration of this case by moving for contempt against Goyens, who plainly has no legitimate purpose in filing papers before this Court, and who has repeatedly flouted the authority of other courts.

I. BACKGROUND

A. The Motion

The Motion requested that this Court enter an order requiring Goyens to withdraw her filing seeking "judicial notice" (the "Request for Notice," ECF Doc. # 10358)¹ and to impose a daily sanction of $100.00 for every day after June 17, 2017 that she failed to do so. (Motion at 1.) As of the Hearing, the Request for Notice had not been withdrawn. The Motion sought entry of an order holding Goyens in contempt, imposing monetary sanctions to compel compliance with the Contempt Order, and providing that if Goyens did not withdraw the Request for Notice after 60 days, the Request for Notice be removed from public view and that further accumulation of monetary sanctions cease. (Id. at 2.) Objections to the Motion were due June 22, 2017; none were filed. The U.S. Trustee served Goyens with the Motion on May 17, 2017. (Id. at 3.) The Court granted the Motion in a form substantially similar to what the U.S. Trustee sought, as described in the Contempt Order.

B. Goyens and Her History Before This Court

On April 17, 2012, Goyens and Robert Daniel Eberwein ("Eberwein") filed a joint voluntary petition for chapter 11 relief; the case was pending before my colleague, Judge Sean H. Lane, as Case No. 12–11580 (SHL) in the U.S. Bankruptcy Court for the Southern District of New York. (Velez–Rivera Decl. at 1–2.) In connection with that chapter 11 case, on October 4, 2012, the U.S. Trustee filed an adversary complaint (the "Adversary Complaint") against Eberwein, Goyens, and others (the "Adversary Case," Adv. Proc. No. 12–01901 (SHL) ). (Velez–Rivera Decl. at 2.) The Adversary Complaint included serious allegations of wrongdoing by the defendants. (Id. )

The Adversary Complaint alleged that Goyens used 45 different names to file for bankruptcy throughout the nation. (Id. at 1–2) Between 1991 and 2009, Goyens filed 34 bankruptcy cases, six bankruptcy appeals, four adversary proceedings, nine civil cases in federal district court, and six appeals in the federal courts of appeals. (Id. at 2) Furthermore, between 2010 and 2012, Goyens filed six bankruptcy cases in the Southern District of New York. (Id. )

On June 27, 2012, in a chapter 13 case filed in this District by Eberwein (see Case No. 12–11486 (SHL)), in response to irrelevant and vexatious e-mails received by the court's staff, the Court entered an order providing "that [Eberwein] or other party in interest, or anyone affiliated or associated with any Debtor or other party in interest ... and any recipient of the emails sent by [Eberwein] to the Court, is prohibited from sending emails or other forms of electronic transmission, including facsimile, to any employee of this federal bankruptcy court, to the United States Trustee (Region 2) or any employee of the United States Trustee, and to any case or standing trustee." (Case No. 12–11486 (SHL), ECF Doc. # 21, at 2.) Because the Debtors had intentionally been submitting large paper filings for no other purpose than to tie down the court's resources, on July 24, 2012, the Court entered another order requiring that, "with respect to any paper filing of more than 20 pages, or filings on the same day totaling more than 20 pages, that is submitted by any Debtor, Plaintiff or other party ... in any such cases or adversary proceedings," an electronic copy of the filing also must be submitted. (Id. , ECF Doc. # 23, at 2.)

New York was not the only State where Goyens engaged in these shenanigans. Goyens is a "vexatious litigant" according to a list maintained by the Judicial Council of the State of California. (Velez–Rivera Decl. at 4.) According to the Adversary Complaint, in 2002, the bankruptcy court for the Eastern District of California entered a 180–day bar order against future filings by Goyens, and the Northern District of California entered a one-year bar order barring filings by Goyens. (Id. at ¶¶ 8–9.) In 2006, the Northern District of California entered an additional order barring Goyens from filing papers for three years. (Id. at ¶ 10.) That same year, the Northern District of California entered an injunction against Goyens, "permanently enjoin[ing] her from filing, in any United States bankruptcy court, any bankruptcy case or adversary proceeding, or any document therein." (Id. at ¶ 11.) Furthermore, in 2007, the U.S. Trustee for Region 17 (encompassing the Northern District of California, the Eastern District of California, and the District of Nevada) sought and obtained an order for civil contempt against Goyens from the U.S. Bankruptcy Court for the Northern District of California. (Id. at ¶ 12.) That court entered an additional contempt order in 2010. (Id. at ¶¶ 12, 14.)

Returning to New York, in 2013, Judge Lane entered a default judgment and injunction (the "Permanent Injunction," Velez–Rivera Decl., Ex. B) against Goyens on the Adversary Complaint. (Id. ) The Permanent Injunction found that:

In a 21–year history of multiple and abusive bankruptcy, civil and appellate cases filed in her own name and under approximately 45 aliases and names of other individuals, which cases have included the filing of several burdensome documents, Defendant Goyens has engaged continually in conduct that is injurious, fraudulent, unfair and deceptive to creditors, this and other Courts, and the bankruptcy process.

(Permanent Injunction ¶ 21.) The Permanent Injunction also provided that:

(B) Chaledeeannka Deborah Ann Williams Goyens–Bell Eberwein, and all persons in concert and participation with her, whether acting on their own behalves or on behalves of others, and whether using their own names or one or more aliases hereby are:

(1) permanently enjoined from filing any new bankruptcy case or adversary proceeding in this and any other United States Bankruptcy Court, and

(2) permanently enjoined from filing any document (including proofs of claim) in any other bankruptcy case or adversary proceeding without first obtaining leave to file such document from the United States Bankruptcy Judge presiding over such bankruptcy case or adversary proceeding.

(Id. at 11.) Relevant to the present case, the U.S. Trustee alleges that the filing of the Request for Notice violates the Permanent Injunction.

II. LEGAL STANDARD

A. Contempt of a Bankruptcy Court's Orders

"Courts have inherent power to enforce compliance with their lawful orders through civil contempt." In re MF Global Holdings Ltd. , 562 B.R. 41, 52 (Bankr. S.D.N.Y. 2017). Further, "bankruptcy courts have power to enter civil contempt orders." Id. It is well settled that a bankruptcy court has broad jurisdiction to enforce injunctions. In re Millenium Seacarriers, Inc. , 419 F.3d 83, 97 (2d Cir. 2005) ("Bankruptcy courts retain jurisdiction to enforce their own orders"). This power derives from the inherent power of the court, along with 11 U.S.C. § 105 and 28 U.S.C. § 157. See Maritime Asbestosis Legal Clinic v. LTV Steel Co. (In re Chateaugay Corp.) , 920 F.2d 183, 187 (2d Cir. 1990) ; see also Caldwell v. Unified Capital Corp. (In re Rainbow Magazine, Inc.) , 77 F.3d 278, 284–85 (9th Cir. 1996). If a civil contempt proceeding arises out of a core matter, the contempt proceeding is core. See Mountain Am. Credit Union v. Skinner , 917 F.2d 444, 447–48 (10th Cir. 1990).

Federal courts consider two factors in determining whether to hold a party in civil contempt: whether the alleged contemnor had notice of the court order, and whether that person complied with the order. See In re Keane , 110 B.R. 477, 482–83 (S.D. Cal. 1990). Furthermore, with respect to compliance with a specific order, the court may impose civil contempt only where (1) the underlying order is clear and unambiguous, (2) proof of non-compliance is clear and convincing, and (3) the contemnor has not been reasonably diligent and energetic in attempting to accomplish what was ordered. See EEOC v. Local 580 , 925 F.2d 588, 594 (2d Cir. 1991) ; see also MF Global , 562 B.R. at 52–53. In this regard, the "clear and convincing" prong requires that "[t]he clarity of the order must be such that it enables the enjoined party to ascertain from the four corners of the order precisely what acts are forbidden." Monsanto Co. v. Haskel Trading, Inc. , 13 F.Supp.2d 349, 363 (E.D.N.Y. 1998) (internal citation and quotation marks omitted). In addition, "[i]n the context of civil contempt, the...