Reynolds & Reynolds Co. v. Alan Vines Auto. of Jackson, LLC
| Decision Date | 26 February 2021 |
| Docket Number | No. 1:20-mc-0003-STA,1:20-mc-0003-STA |
| Parties | THE REYNOLDS & REYNOLDS COMPANY, INC., Plaintiff, v. ALAN VINES AUTOMOTIVE OF JACKSON, LLC, Defendant. |
| Court | U.S. District Court — Western District of Tennessee |
Before the Court is Plaintiff The Reynolds & Reynolds Company, Inc.'s ("Reynolds") Motion for Contempt and Sanctions (ECF No. 28) filed November 13, 2020. Reynolds seeks a court order to hold Defendant Alan Vines Automotive of Jackson, LLC ("Alan Vines Automotive") as well as Alan Vines in his individual capacity in contempt for their failure to comply with a previous court order. On September 28, 2020, the Court entered an order granting in part Reynolds' motion to compel (ECF No. 26) post-judgment discovery responses. The Court ordered Alan Vines Automotive to respond to Reynolds' discovery requests and gave it twenty-eight (28) days to comply. The Court specified that Alan Vines Automotive's duty to respond was "confined to requests for production addressed to the business and operation of Alan Vines Automotive, not the additional persons and businesses listed in Reynolds' requests for production." Order Granting in Part Mot. to Compel 15, Sept. 28, 2020 (ECF No. 26). According to Reynolds, Alan Vines Automotive failed to provide its discovery responses in defiance of the Court's order. Reynolds therefore argues that the Court should find Alan Vines Automotive and Alan Vines in his individual capacity in contempt and impose appropriate sanctions.
Just as he did in response to Reynolds's motion to compel, Vines has responded to the Motion for Contempt in his individual capacity and not on behalf of Alan Vines Automotive. Vines largely raises the same arguments or objections the Court heard and considered in deciding the motion to compel: Alan Vines Automotive is no longer a going concern, the company was insolvent at the time it wound down its affairs, Reynolds already has in its possession much of the documentary proof it seeks in its requests for production, and Reynolds can access all of the financial data on Alan Vines Automotive from software the company leased from Reynolds. Reynolds' initial brief did not address the legal standard appropriate for a finding of contempt or the sanctions warranted for contempt of court.
At the conclusion of the parties' opening round of briefing on the Moton for Contempt, the Court determined that additional briefing from the parties would assist the Court in deciding the Motion. The Court directed Vines to address the following issues: (1) to present evidence to support his claim that the LLC was dissolved in accordance with applicable law and show what effect, if any, the LLC's dissolution had on Reynolds' request to obtain post-judgment discovery and demand for sanctions against Alan Vines Automotive; (2) to address Reynolds' argument that the Court should hold Vines in contempt in an individual capacity for the failure of Alan Vines Automotive to comply with the Court's discovery order; and (3) to raise any other arguments or present evidence Vines wanted the Court to consider in deciding Reynolds' Motion for Contempt. The Court gave Vines 14 days to file his supplemental brief and Reynolds 14 days from the service of Vines' supplemental brief in which to file a reply.
The parties have now completed this round of supplemental briefing. In his supplemental response, Vines continues to argue that he should not be held in contempt for Alan Vines Automotive's failure to obey the Court's order compelling it to produce discovery to Reynolds. Vines emphasizes that Alan Vines Automotive was organized under Tennessee law as a member-managed, limited liability company. While Vines acknowledges that he was a member of the company, he argues that the LLC form shielded him from any individual liability for the obligations of the company. Vines also stresses that Alan Vines Automotive was administratively dissolved in 2019 and that the company was insolvent at the time of its dissolution. Vines contends that after the dissolution of the LLC and the winding down of its affairs, the company's existence was terminated as a matter of law. At that point, Tennessee law no longer required any member of the LLC to defend any claims against the company. In other words, Vines as a member of Alan Vines Automotive is not required to cooperate in these post-judgment discovery proceedings against the now-terminated company. Reynolds cannot show then that Vines violated a definite and specific court order directing him to take some action. Therefore, the Court should not hold him in contempt for any failure to comply with the Court's previous orders.
In its supplemental reply brief, Reynolds argues that the Court's previous order clearly compelled Alan Vines Automotive to respond to specific discovery requests. As a business organization, Alan Vines Automotive can only act through its members like Vines. Reynolds concedes that the Tennessee Secretary of State has administratively dissolved Alan Vines Automotive. However, Reynolds argues that an LLC continues to exist until it files articles of termination. At this point in the proceedings, Vines has not offered any proof that Alan Vines Automotive has filed articles of termination. The Court's order granting Reynolds' motion tocompel clearly required Alan Vines Automotive to respond to discovery and only Vines himself has the capacity to act on behalf of the LLC. Reynolds argues then that the Court can and should hold Vines himself in contempt of the Court's order granting Reynolds' motion to compel.
"Federal courts have broad contempt power, which exists for the preservation of order in judicial proceedings, and to the enforcement of the judgments, orders, and writs of the courts." Brown v. City of Upper Arlington, 637 F.3d 668, 671 (6th Cir. 2011) (quoting Young v. U.S. ex rel. Vuitton et Fils S.A., 481 U.S. 787, 798 (1987)). Contempt of court is a "weapon" in a court's "arsenal" to ensure compliance with an order or judgment of the court. Elec. Workers Pension Tr. Fund of Local Union |58, IBEW v. Gary's Elec. Serv. Co., 340 F.3d 373, 378-79 (6th Cir. 2003). Federal courts use the contempt power to "enforce the message that court orders and judgments are to be complied with in a prompt manner." Paterek v. Village of Armada, Mich., 801 F.3d 630, 643 (6th Cir. 2015) (citing NLRB v. Cincinnati Bronze, Inc., 829 F.2d 585, 588 (6th Cir. 1987)). The Supreme Court has described the inherent power "to punish for contempts" as "a necessary and integral part of the independence of the judiciary" and "absolutely essential to the performance of the duties imposed on them by law." Gompers v. Buck's Stove & Range Co., 221 U.S. 418, 450 (1911).
A civil contempt sanction may serve the purposes "to coerce the defendant into compliance with the court's order, and to compensate the complainant for losses sustained." Gary's Elec. Serv. Co., 340 F.3d at 379 (quoting United States v. United Mine Workers of Am., 330 U.S. 258, 303-04 (1947)); see also Gnesys, Inc. v. Greene, 437 F.3d 482, 493 (6th Cir. 2005) (quoting NLRB v. Cincinnati Bronze, Inc., 829 F.2d 585, 588 (6th Cir. 1987)). A party moving for civil contempt has "the burden of establishing by clear and convincing evidence that[the non-moving party] 'violated a definite and specific order of the court requiring [the non-moving party] to perform . . . a particular act or acts with knowledge of the court's order.'" CFE Racing Prods., 793 F.3d at 598 (quoting Rolex Watch U.S.A., Inc. v. Crowley, 74 F.3d 716, 720 (6th Cir. 1996)). A court must resolve any ambiguities in the prior order in favor of the party charged with contempt. Paterek, 801 F.3d at 643 (citing United States v. Conces, 507 F.3d 1028, 1042 (6th Cir. 2007)).
In the absence of an ambiguity, court decrees "mean rather precisely what they say." Id. (citing Grace v. Ctr. for Auto Safety, 72 F.3d 1236, 1241 (6th Cir. 1996)). "Since the purpose [of civil contempt] is remedial, it matters not with what intent the defendant did the prohibited act." McComb v. Jacksonville Paper Co., 336 U.S. 187, 191 (1949). In other words, "[g]ood faith is not a defense in civil contempt proceedings." Greene, 437 F.3d at 493 (citing Glover v. Johnson, 934 F.2d 703, 708 (6th Cir. 1991)). Perhaps not surprisingly, "[t]here is no requirement to show intent beyond knowledge of the order." CFE Racing Prods., 793 F.3d at 598 (quoting In re Jaques, 761 F.2d 302, 306 (6th Cir. 1985)).
The issue presented is whether the Court should hold Alan Vines Automotive or Alan Vines in his individual capacity in contempt of court for Alan Vines Automotive's failure to comply with the Court's discovery order. Reynolds has registered in this District a judgment it holds against Alan Vines Automotive, a Tennessee limited liability company that formerly operated auto dealerships in Jackson, Tennessee. Reynolds is pursuing post-judgment discovery from the LLC to ascertain whether it still holds any assets in this District. The Court granted Reynolds leave to pursue discovery from Alan Vines Automotive and has ordered the LLC to respond to Reynolds' written discovery requests. The company has not responded and hasotherwise failed to comply with the Court's order, so Reynolds now moves to hold the LLC in contempt. Reynolds also seeks a contempt finding against Vines in his capacity as a member of the LLC. On the surface each of these features of the case is fairly ordinary and unremarkable.
However, this neat summation does not tell the full story. Alan Vines Automotive has not only failed to respond to Reynolds' discovery requests. The LLC has not appeared in these proceedings or responded in any way to Reynolds' requests for relief against it. Instead, Alan Vines himself has responded in his individual capacity, not on...
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