Martin-Trigona, In re

• Decision Date: 14 March 1984
• Docket Number: MARTIN-TRIGON,P,No. 839,D,839
• Parties: , Bankr. L. Rep. P 69,761, 15 Fed. R. Evid. Serv. 216 In re Anthony R.ebtor. Anthony R.laintiff-Appellant, v. Richard BELFORD, Trustee, and Daniel Meister, Trustee, Defendants-Appellees. ocket 84-5003.
• Court: U.S. Court of Appeals — Second Circuit

Page 170

732 F.2d 170

11 Bankr.Ct.Dec. 1010, Bankr. L. Rep. P 69,761,

15 Fed. R. Evid. Serv. 216

In re Anthony R. MARTIN-TRIGONA, Debtor.

Anthony R. MARTIN-TRIGONA, Plaintiff-Appellant, v. Richard BELFORD, Trustee, and Daniel Meister, Trustee,

Defendants-Appellees.

No. 839, Docket 84-5003.

United States Court of Appeals, Second Circuit.

Argued Jan. 23, 1984.

Decided March 14, 1984.

John R. Williams, New Haven, Conn., for plaintiff-appellant.

Richard M. Coan, New Haven, Conn. (Coan, Lewendon & Royston, New Haven, Conn., of counsel), for defendant-appellee Richard Belford.

Before MESKILL, NEWMAN and PRATT, Circuit Judges.

MESKILL, Circuit Judge:

This is an appeal from an order of the United States District Court for the District of Connecticut, Cabranes, J., holding appellant Anthony R. Martin-Trigona in civil contempt for his refusal to comply with a court order requiring him to answer questions

put to him by counsel for the trustee of his estate in bankruptcy during an examination pursuant to Bkrtcy.R. 2004 after a grant of immunity under 18 U.S.C. Sec. 6003 (1982). Judge Cabranes ordered appellant incarcerated until he is ready and willing to testify in full. We stayed the order of incarceration pending the outcome of this appeal. We now vacate the stay and affirm the order below.

BACKGROUND

Appellant is a debtor whose personal bankrupt estate presently is before Judge Cabranes. He is no stranger to the federal courts, Martin-Trigona v. Smith, 712 F.2d 1421, 1423 & n. 1 (D.C.Cir.1983) (per curiam); Martin-Trigona v. Shiff, 702 F.2d 380, 382 & n. 1 (2d Cir.1983), having demonstrated throughout his various proceedings a penchant for obfuscation and delay. In particular, he has gone to great lengths in his bankruptcy matters to avoid testifying about his assets. See, e.g., Martin-Trigona v. Gouletas, 634 F.2d 354 (7th Cir.) (per curiam), cert. denied, 449 U.S. 1025, 101 S.Ct. 593, 66 L.Ed.2d 486 (1980).

On June 23, 1983, shortly after Judge Cabranes transferred to the district court all matters concerning appellant's estate in bankruptcy pending in the United States Bankruptcy Court for the District of Connecticut, counsel for the trustee sought to question appellant pursuant to Bkrtcy.R. 205. ¹ Appellant refused to answer several questions, claiming his Fifth Amendment privilege against self-incrimination. The examination was continued until July 1, 1983. On that date, appellant's prior counsel, M. Hatcher Norris, invited opposing counsel to apply for a grant of immunity and strongly implied that appellant would testify if immunity were forthcoming.

The United States Attorney subsequently applied for immunity under 18 U.S.C. Sec. 6003, stating that appellant's testimony was "necessary to the public interest." On November 3, 1983 Judge Cabranes granted the application for immunity. Examination of appellant was continued until January 3, 1984. ²

Appellant again refused to testify at the hearing held on January 3 on the basis of the privilege against self-incrimination. Judge Cabranes ordered appellant to answer the questions put to him by trustee Belford's counsel. Appellant refused. As a result, Judge Cabranes held appellant in civil contempt and ordered him incarcerated until he was prepared to testify in full. Martin-Trigona appealed and on January 4 we granted his motion for a stay of incarceration pending the disposition of this expedited appeal.

DISCUSSION

Appellant's initial argument is that the immunity statutes, 11 U.S.C. Sec. 344 (1982); ³ 18 U.S.C. Secs. 6001-6005 (1982), ⁴ are inapplicable to civil proceedings. In support of his position he cites two footnotes appearing in Pillsbury Co. v. Conboy, --- U.S. ----, 103 S.Ct. 608, 74 L.Ed.2d 430 (1983), one in the majority opinion and one in the concurring opinion. The majority opinion footnoted "[w]e need not decide whether United States Attorneys, when designated by the Attorney General, presently have authority to immunize the testimony of a witness in a civil proceeding when the Government determines that the public interest would be served." Id. at ---- n. 20, 103 S.Ct. at 616 n. 20. Justice Marshall, in his concurrence, cited the footnote and stated that the issue was an "open question." Id. at ---- n. 4, 103 S.Ct. at 621 n. 4 (Marshall, J., concurring). Appellant argues that these statements somehow indicate that the Supreme Court doubts that the appropriate statutes permit the granting of immunity in order to compel testimony in non-criminal proceedings.

A close look at the statutes in question leaves no doubt as to their applicability to civil proceedings in general and bankruptcy matters in particular. 11 U.S.C. Sec. 344 explicitly incorporates the provisions of 18 U.S.C. Secs. 6001-6005 where immunity is sought "for persons required to submit to examination, to testify, or to provide information in a case under this title...."

The language of 18 U.S.C. Secs. 6001-6003 explicitly applies to all civil proceedings, including bankruptcy proceedings. Section 6003(a) states that the appropriate district court shall issue an order compelling testimony upon request of a duly authorized United States attorney in accordance with the provisions of section 6003(b) "[i]n the case of any individual who has been or may be called to testify or provide other information at any proceeding before or ancillary to a court of the United States...." (emphasis added). Presumably Congress understood the implications of the phrase "any proceeding before a court of the United States." Section 6001 defines "court of the United States" to include bankruptcy courts. This is further evidence of Congress' intent to apply these provisions to bankruptcy proceedings. Section 6002, which provides for use and derivative use immunity for witnesses compelled to testify, states that the section is applicable "[w]henever a witness refuses, on the basis of his privilege against self-incrimination, to testify or provide other information in a proceeding before or ancillary to--(1) a court ... of the United States ...." Other courts have applied the immunity statutes in civil proceedings. See In re Ryan, 538 F.2d 435, 437 n. 2 (D.C.Cir.1976) ("A proceeding in the Tax Court is a proceeding before a 'court of the United States' in which the immunity statute may be invoked."); United States v. Cappetto, 502 F.2d 1351, 1359 (7th Cir.1974), cert. denied, 420 U.S. 925, 95 S.Ct. 1121, 43 L.Ed.2d 395 (1975) (civil RICO); In re Channel, 29 B.R. 316, 318 (Bkrtcy.W.D.Ky.1983) (proper method to obtain testimony from a debtor claiming the privilege against self-incrimination is to request the United States attorney to apply for a grant of immunity).

Appellant's second claim is that even if he can be compelled to testify according to 11 U.S.C. Sec. 344, the consequence of his refusing to do so should only be a denial of his discharge, not contempt. This point is meritless.

"[C]ourts have inherent power to enforce compliance with their lawful orders through civil contempt." Shillitani v. United States, 384 U.S. 364, 370, 86 S.Ct. 1531, 1535, 16 L.Ed.2d 622 (1966) (citations omitted). District courts acting as courts of bankruptcy have a long history of issuing contempt citations for failure to obey their lawful orders. See, e.g., Block v. Consino, 535 F.2d 1165 (9th Cir.), cert. denied, 429 U.S. 861, 97 S.Ct. 165, 50 L.Ed.2d 140 (1976) (affirming contempt citation for failure to answer questions despite a grant of immunity); O'Hagan v. Blythe, 354 F.2d 83, 84 (2d Cir.1965); In re Manufacturers Trading Corp., 194 F.2d 948, 956 (6th Cir.1952); Espiefs v. Settle, 14 B.R. 280, 286 (D.C.N.H.1981) (debtor may be held in contempt for failing to testify despite a grant of immunity); In re Parr, 13 B.R. 1010, 1015 (D.C.E.D.N.Y.1981); 1 Collier on Bankruptcy p 2.58 (14th ed. 1974).

Appellant argues that 11 U.S.C. Sec. 727(a)(6)(B) (1982) ⁵ and the relevant legislative history, S.Rep. No. 989, 95th Cong., 2d Sess. 44 (1978), reprinted in 1978 U.S.Code Cong. & Ad.News 5787, 5830 and H.Rep. No. 595, 95th Cong., 1st Sess. 333 (1977), reprinted in 1978 U.S.Code Cong. & Ad.News 5963, 6289, indicate that the only sanction which may be imposed on a debtor who refuses to testify despite a grant of immunity is a denial of discharge. We disagree. The statute and the legislative history indicate that a debtor may be denied a discharge as a result of his failure to testify only when he continues to refuse to testify after a grant of immunity. ⁶ It does not indicate that denial of the debtor's discharge is the exclusive penalty for failing to testify despite immunity. ⁷ Furthermore, if the denial of discharge were the only penalty for refusing to testify, then a witness other than the debtor granted immunity under section 344 would have no incentive to testify. Obviously, this is not what Congress intended by section 727(a)(6)(B).

Since the civil contempt order was proper, incarceration was an appropriate remedy. 28 U.S.C. Sec. 1826(a) (1976) provides in pertinent part that:

Whenever a witness in any proceeding before or ancillary to any court ... of the United States refuses without just cause shown to comply with an order of the court to testify or provide other information ... the court, upon such refusal ... may summarily order his confinement at a suitable place until such time as the witness is willing to give such testimony or provide such information.

(emphasis added). The use of the word "any" indicates that Congress intended this section to apply to bankruptcy proceedings. Even without the statute, a court may coerce a recalcitrant witness to testify through incarceration. Uphaus v. Wyman, 360 U.S. 72, 81, 79 S.Ct. 1040, 1046, 3 L.Ed.2d 1090 (1959); In re Grand Jury Investigation (Braun), 600 F.2d 420, 422 (3d Cir.1979) ("Embedded in Anglo-American law is the inherent power of the judiciary to coerce obedience to its orders by summarily holding a recalcitrant person--such as an immunized...