Nasco, Inc. v. Calcasieu Television & Radio, Inc., Civ. A. No. 83-2564.

• Decision Date: 23 March 1984
• Docket Number: Civ. A. No. 83-2564.
• Citation: 583 F. Supp. 115
• Parties: NASCO, INC. v. CALCASIEU TELEVISION & RADIO, INC., et al.
• Court: U.S. District Court — Western District of Louisiana

583 F. Supp. 115

NASCO, INC. v. CALCASIEU TELEVISION & RADIO, INC., et al.

Civ. A. No. 83-2564.

United States District Court, W.D. Louisiana, Lake Charles Division.

January 23, 1984.

Judgment March 23, 1984.

COPYRIGHT MATERIAL OMITTED

John B. Scofield, Lake Charles, La., for plaintiff.

A.J. Gray, Lake Charles, La., for defendants.

NAUMAN S. SCOTT, District Judge.

RULING

This matter is before us on an Order to Show Cause why the respondents Calcasieu Television & Radio, Inc. (hereinafter "CTR") and G. Russell Chambers should not be punished for contempt of court for failure to comply with a preliminary injunction. A hearing was held in open court on December 22, 1983. Upon consideration of the evidence adduced, the parties' briefs, and arguments of counsel, we dispose of this matter as follows:

FINDINGS OF FACT

1. We entered a preliminary injunction on October 24, 1983, which, inter alia, restrained the respondents CTR and G. Russell Chambers from conveying or otherwise disposing of the television assets of KPLC-TV pending resolution of petitioner's suit for specific performance and damages. In relevant part, the order further provides as follows:

"Defendants CTR and G. Russell Chambers, their agents, employees, servants, attorneys and all other persons in active concert and participation with them are also restrained and enjoined from prohibiting or otherwise interfering with the access by plaintiff and plaintiff's representatives, including its counsel, accountants and the appraiser selected by plaintiff, during normal business hours to the properties, contracts, leases, files, books of accounts or other records related to the assets purchased under the terms of the purchase agreement dated August 9, 1983, and the operation of television station KPLC-TV for purposes of examining same ..."

(Record at 3) (emphasis added).

2. Both counsel agree that petitioner's representatives were denied access to CTR's general ledger and 1982 income tax return by the respondents as set forth in the affidavit of plaintiff's counsel, John B. Scofield. (Contempt proceeding transcript, p. 3). This affidavit reads in pertinent part as follows:

"Pursuant to NASCO, INC.'s contractual obligation to examine and inspect the records and books of CTR, plaintiff, through appearer, contacted opposing counsel, A.J. Gray, III, on November 25, 1983, and requested that plaintiff be given permission to inspect certain records of the defendants, including the general ledger and 1982 income tax return of CTR. Appearer requested that this inspection be permitted to take place on Monday, November 21, 1983 at the offices of CTR.

"On November 18, 1983, at approximately 9:20 a.m., attorney A.J. Gray, III, representing both G. Russell Chambers and CTR, telephoned appearer and advised that plaintiff would not be given permission to examine the records in question. Appearer then asked Mr. Gray if it would be necessary for plaintiff to have its representative appear at the television station in order that refusal of defendants to grant access could be demonstrated. Mr. Gray replied that this would not be necessary and that he would verify to the court that the permission had been denied. In this conversation, Mr. Gray made it clear that he had discussed plaintiff's request with Mr. Chambers and that Mr. Chambers had directed him to deny the request.

(Petitioner's Exhibit "A").

3. The general ledger is a record of all financial activity of CTR. It includes information which relates to the broadcast and non-broadcast properties and operations of CTR. Respondents have supplied excerpts which they believe relate to the "assets purchased" but refused to disclose the information related to the non-broadcasting properties.

4. The entire ledger is needed by petitioners to verify warranties of the seller have been fulfilled prior to their expiration on the date of closing. In addition, petitioner must be able to verify the accuracy of the information supplied thus far. The general ledger is the most important financial document which relates to the operation of the television station.

5. Respondent CTR's Director of Accounting, Miss Louviere, admitted that she had no idea what harm would result from petitioner's examination of the general ledger. She "presumed Mr. Chambers would know", but he did not appear or testify at the proceeding.

6. Respondent has produced books of contracts and other information in compliance with the injunction.

CONCLUSIONS OF LAW

Federal law recognizes two types of contempt: civil and criminal. "Criminal contempt is punitive rather than remedial; it punishes disobedience of a court order as vindication of the court's authority". Wolfe v. Coleman, 681 F.2d 1302, 1306 (11th Cir.1982). Civil contempt, however, "is designed to coerce the contemnor to comply with a court order" and "is brought by a private party, not the court." Id. Even though the same conduct may result in both civil and criminal contempt charges, Id. at 1308, the nature of the proceeding is determined by its remedial or punitive purpose.

The instant proceeding was initiated by petitioner under a pleading styled "Petition for Rule to Show Cause Why Defendants G. Russell Chambers and CTR Should Not Be Punished For Contempt". Its purpose is to obtain coercive and compensatory relief; it is remedial rather than punitive. The action, therefore, is obviously one for civil contempt. See, In Re Dinnan, 625 F.2d 1146 (5th Cir.1980); In Re Grand Jury Investigation, 610 F.2d 202 (5th Cir.1980).

In a civil contempt proceeding, the petitioner bears the burden of proving that respondent violated some court order by clear and convincing evidence. Louisiana Ed. Ass'n v. Richland Parish School Bd., 421 F.Supp. 973, aff'd, 585 F.2d 518 (5th Cir.1978). To establish a prima facie case, we believe petitioner must show: (1) That a court order is in effect; (2) That the order prescribes or requires certain conduct by the respondent; and (3) That respondent has performed an act or failed to perform an act in violation of the court's order. Petitioner need not show that the violation was willful. McComb v. Jacksonville Paper Co., 336 U.S. 187, 191, 69 S.Ct. 497, 499, 93 L.Ed. 365 (1949).

Once petitioner has presented a prima facie case, the burden falls upon the respondent to assert defenses or mitigating circumstances that might cause the court to withhold the exercise of its contempt power. Louisiana Ed. Ass'n, supra, at 977. Where a legally sufficient defense is asserted, such as respondents' present inability to comply with the order, this burden is merely one of production rather than persuasion. U.S. v. Rylander, ___ U.S. ___, 103 S.Ct. 1548, 75 L.Ed.2d 521 (1983). However, where respondent offers a mitigating circumstance, such as good faith, it is our province to tailor sanctions in light of the circumstances offered. In all cases, however, the petitioner bears the burden of persuasion throughout the entire proceeding.

We find that plaintiff has proven a prima facie case of civil contempt by clear and convincing evidence. Undeniably, our Order of October 24, 1983 required respondents to permit petitioner and its representatives access to all books, records, accounts, etc., which relate to the assets purchased. The general ledger of CTR is certainly the most important record relating to the financial activity surrounding the assets purchased. It admittedly includes the most current and accurate record of the financial activity of the television station itself. Likewise, the 1982 IRS tax return is also a salient document relating to the assets purchased. The respondents expressly warranted that this tax liability was paid, and petitioner cannot be expected to waive any right pertaining to the satisfaction of that warranty without examining this tax return. It is also admitted by respondents that they denied petitioner access to these two records despite the preliminary injunction. Accordingly, we have little difficulty in finding that petitioner has proven a prima facie case of civil contempt by clear and convincing evidence.

Respondents assert that: (1) The Order contains ambiguous language and does not require disclosure of portions of the general ledger which relate to the non-broadcast properties of CTR; (2) They have acted in good faith by allowing plaintiff access to pertinent portions of the general ledger which they have determined are relevant to the assets purchased and have otherwise substantially complied with our order.

We believe, however, that these defenses and circumstances are insufficient to deny petitioner's rights under our Order. See McComb, supra; Louisiana Ed. Ass'n, supra. While it is clear that a respondents may assert their present inability to comply with the Order in question as a defense, Rylander, supra, we have found no cases, and none were cited by respondents, where a Federal Court recognized an ambiguity in its order as a legally sufficient defense to a charge of civil contempt. Rather, the cases indicate otherwise.

A party's compliance with a court order cannot be avoided by "a literal or hypertechnical reading of an order", for it is "the spirit and purpose of the injunction, not merely its precise words, that must be obeyed". National Research Bureau, Inc. v. Kucker, 481 F.Supp. 612, 615 (S.D.N.Y.1979). Moreover, we cannot say that the tax return and the general ledger, albeit containing some information unrelated to the assets purchased, do not fall within the language of our injunction as reasonably construed. See, Alabama Nursing Home Ass'n v. Harris, 617 F.2d 385 (5th Cir.1980). Even though an ambiguity exists, which may arguably be the case here, it is not excuse for the respondents to make an ad hoc interpretation to determine its meaning. Our Order must be obeyed and cannot be ignored unless it is withdrawn or vacated. W.B. Grace Co. v. Local 759, ___ U.S. ___, 103 S.Ct. 2177, 76 L.Ed.2d 298, 307 (1983). In this...