Liberty Propane L.P. v. Feheley

12-3132-cv
Liberty Propane L.P., et al. v. Feheley
UNITED STATES COURT OF APPEALS
FOR THE SECOND CIRCUIT
SUMMARY ORDER
RULINGS BY SUMMARY ORDER DO NOT HAVE PRECEDENTIAL EFFECT. CITATION TO A SUMMARY ORDER FILED
ON OR AFTER JANUARY 1, 2007, IS PERMITTED AND IS GOVERNED BY FEDERAL RULE OF APPELLATE PROCEDURE
32.1 AND THIS COURT’S LOCAL RULE 32.1.1. WHEN CITING A SUMMARY ORDER IN A DOCUMENT FILED WITH THIS
COURT, A PARTY MUST CITE EITHER THE FEDERAL APPENDIX OR AN ELECTRONIC DATABASE (WITH THE
NOTATION “SUMMARY ORDER”). A PARTY CITING A SUMMARY ORDER MUST SERVE A COPY OF IT ON ANY
PARTY NOT REPRESENTED BY COUNSEL.
At a stated term of the United States Court of Appeals for the Second Circuit, held
at the Thurgood Marshall United States Courthouse, 40 Foley Square, in the City of New
York, on the 28th day of May, two thousand thirteen.
PRESENT:
RALPH K. WINTER,
GUIDO CALABRESI,
GERARD E. LYNCH,
Circuit Judges.
_________________________________________
Liberty Propane L.P., Liberty Propane Operations, LLC,
Plaintiffs-Appellees,
v. 12-3132-cv
David R. Feheley,
Defendant-Appellant,
Sun Energy Incorporated, Inisfree Holding, LLC,
Defendants.
_________________________________________
FOR APPELLANT: Charles F. Brower, Torrington, CT.
Appeal from an order of the United States District Court for the Northern District of
New York (David N. Hurd, J.).
UPON DUE CONSIDERATION, IT IS HEREBY ORDERED, ADJUDGED,
AND DECREED that the order entered on July 17, 2012 is VACATED and the case is
REMANDED to the district court for further proceedings consistent with this order.
Appellant David Feheley appeals from an order of the district court holding him in
civil contempt and sanctioning him for failure to comply with the district court’s March 12,
2012 and June 29, 2012 orders. We assume the parties’ familiarity with the underlying
facts and procedural history.
Where, as here, a district court holds a party in civil contempt and imposes
sanctions for a bad-faith violation of a prior court order, we review the contempt finding
“under an abuse of discretion standard that is more rigorous than usual, and we conduct a
de novo review of any rulings of law made by the district court.” See S. New England Tel.
Co. v. Global NAPs Inc., 624 F.3d 123, 145 (2d Cir. 2010) (internal quotation marks
omitted).* A party may be held in civil contempt for failure to comply with a court order
only if: “(1) the order . . . is clear and unambiguous, (2) the proof of noncompliance is clear
* The appellees, both corporate entities, are unrepresented on appeal. Because such
entities may not appear pro se in this Court, see 28 U.S.C. § 1654; Eagle Assocs. v. Bank
of Montreal, 926 F.2d 1305 (2d Cir. 1991), appellees were notified on August 15, 2012 that
they would be deemed in default if they failed to retain counsel. Appellees have not
retained counsel and are therefore in default. Nonetheless, because the appellees, and not
the appellant, have defaulted, the court retains jurisdiction over the appeal, and the usual
standard of review applies. See Chao v. Russell P. Le Frois Builder, Inc., 291 F.3d 219,
226 (2d Cir. 2002); Fed. R. App. P. 31(c).
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and convincing, and (3) the contemnor has not diligently attempted to comply in a
reasonable manner.” Paramedics Electromedicina Comercial, Ltda v. GE Med. Sys. Info.
Techs., Inc., 369 F.3d 645, 655 (2d Cir. 2004) (internal quotation marks omitted). “A clear
and unambiguous order is one that leaves no uncertainty in the minds of those to whom it is
addressed.” King v. Allied Vision, Ltd., 65 F.3d 1051, 1058 (2d Cir. 1995) (internal
quotation marks omitted). “[W]hen a district court’s ruling on a contempt motion is
challenged on appeal, its interpretation of the terms of the underlying order or judgment is
subject to de novo review . . . .” Latino Officers Ass’n City of N.Y., Inc. v. City of New
York, 558 F.3d 159, 164 (2d Cir. 2009).
The district court order holding Feheley in contempt and imposing sanctions states
only that “[t]he defendant has wilfully failed to comply with the Orders dated March 12,
2012, and June 29, 2012.” It does not explain how Feheley failed to comply with those
orders. At a conference held on September 12, 2012, nearly two months after the contempt
order issued, the district court expressed frustration that Feheley had not produced the
promissory notes memorializing his alleged debts to Peggy A. Bottge. However, neither of
the prior orders had clearly directed Feheley to produce the notes. The first did not
mention the debt to Bottge or the promissory notes, or even ask for an accounting of
Feheley’s debts more generally. The second instructed Feheley to “set forth by affidavits
and documents the legal and personal relationship between himself and Bottge as well as
the specific reasons the above sum was endorsed over to her,” but it did not expressly
require Feheley to produce all relevant documents, or the promissory notes specifically.
We cannot say that these orders “[left] no uncertainty in [Fehelely’s] mind[]” as to
what the court expected him to produce. King. 65 F.3d at 1058. Because the language of
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the March 2012 and June 2012 orders was not clear and unambiguous, we conclude that the
district court exceeded its discretion when it held Feheley in contempt and imposed
monetary sanctions.
In so holding, we do not address the district court’s authority to impose sanctions
for possible discovery abuses, such as answering interrogatories falsely and withholding
information clearly relevant to plaintiffs’ discovery requests. “A district court has broad
power to impose Rule 37(b) sanctions in response to abusive litigation practices,” Friends
of Animals, Inc. v. U.S. Surgical Corp., 131 F.3d 332, 334 (2d Cir. 1997), but where, as
here, sanctions are based on a finding of contempt, they must be based on bad-faith
disregard of a “clear and unambiguous” order, S. New England Tel. Co., 624 F.3d at 145
(internal quotation marks omitted).
For the foregoing reasons, the July 17, 2012 order of the district court is
VACATED, and the case is REMANDED to the district court for further proceedings
consistent with this order.
FOR THE COURT:
Catherine O’Hagan Wolfe, Clerk
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