In re: Icenhower, No. 12-56329 (9th Cir. 2014)
Annotate this CaseThis appeal arose from contempt sanctions issued by the bankruptcy court against the Diazes for failing to transfer a Mexican coastal villa to Kismet. The court concluded that: (1) the bankruptcy court had jurisdiction to substitute Axolotl as transferee; (2) the bankruptcy court did not violate due process in imposing certain sanctions; (3) the ACJ was sufficiently specific to support a finding of contempt; (4) even if "legal impossibility" excused noncompliance, the Diazes have not demonstrated that compliance with the ACJ was legally impossible; (5) the bankruptcy court's findings of contempt for the period up to November 25 were not clearly erroneous; (6) the Diazes' claim that the bankruptcy court lacked jurisdiction to quantify fees and costs in its order of December 18, 2008 was moot where the order was vacated by the district court; and (7) the bankruptcy court properly abrogated attorney-client privilege where Mr. Diaz implicitly waived privilege with regard to communications on certain subjects. The court also concluded that the district court did not err in vacating the compulsory sanctions of $25,000 per day for the period from November 26, 2008 to December 4, 2008. Finally, the court granted requests for judicial notice. Accordingly, the court affirmed the judgment of the district court.
Court Description: Bankruptcy. The panel affirmed the district court’s judgment affirming in part and vacating in part the bankruptcy court’s post- judgment imposition of contempt sanctions on defendants for failing to transfer a Mexican coastal villa to the plaintiff in a bankruptcy adversary proceeding. The panel held that the bankruptcy court had jurisdiction, post-judgment, to substitute a property transferee because it retained jurisdiction to supervise the course of conduct mandated by the judgment. The panel held that even though the bankruptcy court’s contempt and sanctions orders were based solely on affidavits, they did not violate due process because, in light of the defendants’ noncompliance with the judgment, the defendants bore the burden of showing their inability to comply. The panel held that the judgment was sufficiently specific to support a finding of civil contempt because it ordered the defendants to undertake a specific and definite course of conduct: to transfer the villa interest to the plaintiff or its assignee. The panel rejected the defendants’ argument that Mexican law rendered compliance with the judgment impossible. The panel also held that the bankruptcy court’s findings of contempt for a particular period were not clearly erroneous. The panel held that the bankruptcy court did not err in issuing an order abrogating a defendant’s attorney-client privilege. On the plaintiff’s cross-appeal, the panel held that the district court did not err in vacating compulsory sanctions of $25,000 per day for a period before the defendants were put on notice that their continued occupation of the villa would trigger such sanctions.
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