GENE HOLLOWAY v. RUTH M. HOLLOWAY AND ANN B. OLDFATHER, ESQ.
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RENDERED: May 29, 1998; 2:00 p.m.
NOT TO BE PUBLISHED
NO. 96-CA-2709-MR
GENE HOLLOWAY
APPELLANT
APPEAL FROM JEFFERSON CIRCUIT COURT
HONORABLE RICHARD J. FITZGERALD, JUDGE
ACTION NO. 88-CI-003564
v.
RUTH M. HOLLOWAY AND ANN B. OLDFATHER, ESQ.
APPELLEES
OPINION
AFFIRMING IN PART, REVERSING IN PART AND REMANDING
* * *
BEFORE:
BUCKINGHAM, KNOX, AND MILLER, JUDGES.
KNOX, JUDGE:
This is an appeal from the order of the Jefferson
Circuit Court holding appellant in contempt of court for failure to
comply with a prior agreed order signed by the trial court on
September 22, 1995.
Following a hearing on the contempt motion,
the trial court imposed, as sanctions, a monetary penalty in the
form of a $1,000.00 charitable contribution, and the award of
$2,000.00 in attorney fees.
The underlying matter involves a protracted dissolution
action in which the court's involvement has now spanned some ten
years.
As the marital estate was sizeable1, the court addressed an
abundance of complex issues regarding the division of property. The
final act necessary to bring closure to the entire matter involved
appellant's
compliance
with
the
above
mentioned
agreed
order
directing, inter alia,2 that:
On or before 5 o'clock p.m., September 29,
1995, the [appellant] shall execute stock
powers, and any other documentation required,
to transfer all of his rights, title and
interest in and to the stock of MRH
Development Co., Inc., and MRH Real Estate
Inc. . . . to the parties' daughter, Phyllis
Bradbury, and the parties' grandsons, David
Abbott and Joe Abbott, with one-third (1/3)
going outright to each.
Phyllis Bradbury
shall be custodian of the stock transferred to
Joe Abbott under the Uniform Gift to Minors
Act until Joe Abbott obtains the age of
majority.
Copies of all such transfers and
related
documentation
shall
be
promptly
provided to [appellee].
Mr. Holloway did transmit instruments of transfer for
said stock at approximately 5 o'clock p.m. on September 29, 1995,
although, the instruments inadvertently failed to note the transfer
to the parties' minor grandson was under the Uniform Gift to Minors
Act. Corrected instruments of transfer were subsequently issued on
October 3, 1995.
numerous
Between October 1995 and March 1996 there were
conversations
and
correspondence
requesting
that
Mr.
1
The record reflects the property to be divided retained a
value exceeding tens of millions of dollars.
Likewise, the
property consisted of investment stocks, real estate, notes
receivable and payable, trusts, insurance policies, bank accounts,
business entities and the like.
2
The agreed order under discussion further required appellant
to transfer three (3) parcels of real property, the performance, of
which, is not at issue here.
2
Holloway procure the issuance of new stock certificates for the MRH
related companies.
The record reflects that on March 28, 1996, Mrs. Holloway
filed a motion for a rule based upon Mr. Holloway's failure to
comply with the agreed order, in that new stock certificates had
yet to be issued.
were delivered.3
On April 1, 1996 the subject stock certificates
The contempt hearing was held in June 1996 and in
August 1996, the trial court entered its order directing that Mr.
Holloway be held in contempt for what the trial court perceived to
constitute
deliberate
disregard
for
the
court's
orders
and
attenuated expectations. The trial court's ultimate order held Mr.
Holloway
in
contempt
and
imposed
the
$1,000.00
charitable
contribution and $2,000.00 attorney fees as sanctions.
Based upon
the foregoing analysis of legal precedent, we reverse the monetary
sanction and affirm the award of attorney fees.
BACKGROUND
A cursory background is required to shed some insight on
the trial court's procedural history regarding the issues of
contempt and attorney fees with respect to these parties. Over the
decade's course, the trial court has encountered several occasions
3
There was some question regarding the absence of a date of
issuance on the new stock certificates, which left lingering a
question as to 1995 tax treatment for purposes of ownership.
However, the parties have not raised this matter, hence, it is not
a topic under this Court's consideration.
Moreover, since the
trial judge has rendered a judgment on the effective date of the
stock ownership, the issue is moot. Shelby Petroleum Corp. v.
Croucher, Ky. App., 814 S.W.2d 930, 933 (1991).
3
in which it was compelled to exercise its power of contempt by
virtue of appellant's contrary conduct.
In July 1989, appellant was held in contempt for failure
to comply with the court's expectation regarding the disposition of
certain funds.
Again in October 1991, the court held appellant in
contempt for failing "to appreciate the necessity of conforming his
behavior to the expectations of the court in this dissolution
proceeding" and imposed a fine of $1,000.00, the payment of which
was suspended until the date of final dissolution decree and
conditioned
orders.
on
"strict
compliance"
with
all
other
compelling
In February 1993, a motion was made to hold appellant in
contempt for failure to complete work the parties had agreed to be
performed on a parcel of marital farm property prior to the closing
of same.
This particular motion was taken under submission for
trial in expectation of an already assigned trial date. Failure to
permit appellee access to marital properties for the purpose of
conducting
an
inventory
landed
appellant
contempt citation in January of 1994.
with,
yet,
another
In that instance the court
specifically admonished Mr. Holloway for "willful and intentional
behavior," and provided the payment of attorney fees generated for
enforcement of the court's order but withheld the imposition of
sanctions until the conclusion of trial on the matter.
Appellant argues that the trial judge erred in holding
him in contempt as the terms and conditions of the agreed order had
been fully complied with prior to the June 11, 1996 hearing.
He
grounds his argument on the basis that the contempt charge was
4
civil in nature, thus the imposition of any sanction therefor was
impermissible.
Appellee contends the trial judge retained the authority
to impose punitive sanctions upon the contemnor for his constant
disregard of the court's authority.
In other words, the imposed
punishment was directed at Mr. Holloway's previous course of
recalcitrant conduct.
sanction
was
Appellee's position suggests the contempt
criminal
in
nature
and
operated
as
a
means
of
preserving the court's decorum and preventing the obstruction of
justice.
Our
interpretation
of
legal
precedent
within
this
jurisdiction does not squarely conform with either of the abovementioned arguments.
It is our opinion that although a contempt
proceeding is civil in nature, sanctions are permissible. White v.
Sullivan, Ky. App., 667 S.W.2d 385, 387 (1983).
However, the
somewhat extraordinary condition attached to the purely monetary
penalty (i.e. a charitable contribution) requires reversal of the
trial court's order in that respect; otherwise, the award of
attorney fees was proper.
CONTEMPT: Civil v. Criminal
Contempt is "the willful disobedience toward, or open
disrespect for, the rules or orders of a court. 'Contempts are
either civil or criminal.'" Commonwealth v. Burge, Ky., 947 S.W.2d
805, 808 (1997) (quoting Gordon v. Commonwealth, 141 Ky. 461, 133
S.W. 206, 208 (1911)).
Although the distinction between character
and conduct constituting civil contempt is often convoluted and
5
confused with criminal contempt, there exists some fairly clear
principles upon which to rely for resolution of this dilemma.
It is not the fact that a sanction has been imposed but
rather the nature and purpose of the sanction/punishment that serve
to
distinguish
Schroering,
Ky.
civil
from
App.,
763
criminal
S.W.2d
145,
contempt.
147
Campbell
(1988)
v.
(citation
omitted). The purpose of civil contempt is to coerce the contemnor
into
conforming
commandment.
his
behavior
in
accordance
with
the
court's
The familiar phrase defining the characteristic of
civil contempt is that those so charged "carry the key of their
prison in their own pockets." Shillitani v. United States, 384 U.S.
364, 368, 86 S.Ct. 1531, 16 L.Ed.2d 622, 626 (1966) (citation
omitted); Blakeman v. Schneider, Ky., 864 S.W.2d 903, 906 (1993).
If the act of disobedience consists solely of failing or
refusing to do what the court has ordered, the conduct constitutes
civil contempt. Shillitani, 384 U.S. at 368; Burge, 947 S.W.2d at
808.
A contemptuous party may purge himself thereof by merely
obeying the court's order. Id.
Moreover, the purpose of imposing
civil contempt sanctions is for the benefit of a party litigant.
Id.
In sum, "civil contempts are those quasi contempts which
consist in failure to do something which the contemnor is ordered
by the court to do for the benefit or advantage of another party to
the proceeding before the court. . . ." Levisa Stone Corp. v. Hays,
Ky., 429 S.W.2d 413, 414 (1968) (quoting Jones v. Commonwealth, 308
Ky. 233, 213 S.W.2d 983, 985 (1948)).
6
Alternatively,
there
is
criminal
levied for the purpose of punishment.
consists
of
doing
something
which
Blakeman, 864 S.W.2d at 906.
disrespect
of
administration
the
court
of
justice,
contempt4
which
is
The act of disobedience
the
court
has
prohibited.
"Criminal contempts are all acts in
or
its
or
process
tend
to
which
bring
obstruct
the
court
the
into
disrepute." Levisa Stone, 429 S.W.2d at 414 (quoting Jones v.
Commonwealth, 213 S.W.2d at 985).
In
the
case
sub
judice,
we
believe
Mr.
Holloway's
conduct, in delaying performance under the agreed order, would have
constituted civil contempt. The act of disobedience, untimely
compliance with the agreed order, was purely a matter of not doing
what the court had ordered, rather than doing something that the
court had prohibited. See Blakeman, 864 S.W.2d at 906.
The direct
result of Mr. Holloway's tardiness was injury, in the form of
aggravation, time consumption, uncertainty as to tax consequences,
and accumulation of attorney fees, to Mrs. Holloway.
However,
Mr.
Holloway
had
delivered
the
new
stock
certificates, albeit undated, prior to the June 11, 1996 contempt
4
Criminal contempt can take one of two forms; that is, either
direct or indirect. Direct contempt is committed in the actual
presence of the court, insulting the court's decorum and
proceedings.
This form of contempt can be punished summarily
absent any need for fact finding proceedings as all elements of the
offense are within the personal knowledge of the court. In re
Terry, 128 U.S. 289, 9 S.Ct. 77, 32 L.Ed. 405 (1888). Indirect
contempt occurs outside the court and requires a hearing be had on
all elements of the offense to establish whether the court's order
has been violated. Its punishment requires proceedings which
satisfy due process. Commonwealth v. Burge, Ky., 947 S.W.2d 805,
808 (1997).
7
hearing.
As such, Mr. Holloway had effectively complied with the
court's order and if held in contempt there was no possible means
by which to purge himself thereof.
Unlike
its
criminal
counterpart,
civil
contempt is "wholly remedial" serves only the
purpose of a party litigant, and is intended
to coerce compliance with an order of the
court or to compensate for losses or damages
caused by non-compliance.
White v. Sullivan, Ky. App., 667 S.W.2d 385, 387 (1983) (emphasis
added).
Although we can appreciate the trial court's frustration
with Mr. Holloway's history of delaying the finality of this
dissolution action, the imposition of a monetary sanction, payable
to the charity of appellee's choice, can neither operate as a
remedy for a party litigant nor coerce compliance. See id. Rather,
such a sanction serves merely as a windfall to an unrelated third
party.
Such is not the intended purpose of compensatory damage
awards in civil contempt proceedings. In civil contempt actions the
remedies are designed "to compensate the aggrieved party." Id. at
387.
For
this reason, we believe the trial court erred in
directing Mr. Holloway to make a $1,000.00 charitable contribution.
ATTORNEY FEES
The determination of an award of attorney fees is a
matter committed to the sound discretion of the trial court.
It is
"[t]hat court [which] is in the best position to observe conduct
and tactics which waste the court's and attorneys' time and must be
given wide latitude to sanction or discourage such conduct." Gentry
v. Gentry, Ky., 798 S.W.2d 928, 938 (1990).
8
Furthermore, KRS 403.220 plainly provides:
The court from time to time after considering
the financial resources of both parties may
order a party to pay reasonable amount for the
cost to the other party of maintaining or
defending any proceeding under this chapter
and for attorney's fees, including sums for
legal services rendered and costs incurred
prior to the commencement of the proceeding or
after entry of judgment. The court may order
that the amount be paid directly to the
attorney, who may enforce the order in his
name.
In light of the trial court's detailed recitation accounting the
obstructive tactics and persistent lack of cooperation on Mr.
Holloway's part, we believe the record amply supports the award of
attorney fees.
Accordingly,
based
upon
the
fact
that
the
monetary
sanction was designed for the benefit of a disinterested third
party, as opposed to compensate the aggrieved party, we reverse the
Jefferson Circuit Court's sanction of $1,000.00 in the form of a
charitable contribution.
Since the trial judge acted well within
the realm of judicial discretion and under statutory authority, we
affirm the award of $2,000.00 in attorney fees.
This case is
remanded for proceedings consistent with this opinion.
ALL CONCUR.
9
BRIEF FOR APPELLANT:
BRIEF FOR APPELLEE:
David A. Black
Middletown, Kentucky
Ann B. Oldfather
Jennifer Jordan Hall
Louisville, Kentucky
10
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