3/26/2012 72 MINUTES OF DEFENDANT INVESTORSHUB.COM INC.S MOTION FOR CONTEMPT AND/OR SANCTIONS AGAINST PLAINTIFF FOR FAILURE TO COMPLY WITH COURTS ORDER RE PAYMENT OF ATTORNEYS FEES (Dkt. 61): Motion Hearing held before Judge John A Kronstadt: the Court orders Plaintiff to participate in a debtors examination at a mutually agreed upon time and place during the period between June 13, 2012 and June 22, 2012. The Court imposes a $2,500 sanction based on the reasonableness of the fees incurred given the time spent, results achieved and hourly rates of counsel. Thus, such fees would not have been necessary absent Plaintiffs conduct toward this Courts Order that he pay certain attorneys fees. The payment of this sanction is stayed pending the conclusion of Plaintiffs debtors examination. The Court sets a status conference for July 2, 2012 at 1:30 p.m., and will stay the entry of sanctions through that time. The parties are ordered to file a status report not to exceed three pages onor before June 27, 2012, apprising the Court of any new developments and the result of the debtors examination. If the debtors examination demonstrates that Plaintiff does not have the additional assets identified by Defendant, then Plaintiff can seek relief from the $2,500 sanction at that time. Court Reporter: Alex Joko. (shb) (Entered: 03/28/2012)
DEFENDANT INVESTORSHUB.COM INC.’S MOTION FOR CONTEMPT AND/OR SANCTIONS AGAINST PLAINTIFF FOR FAILURE TO COMPLY WITH COURT’S ORDER RE PAYMENT OF ATTORNEY’S FEES (Dkt. 61)
The continued motion hearing is held. The Court states its tentative view on the record and is inclined to deny the motion for contempt. Defendant has not satisfied the procedural requirements for criminal contempt, and has stated it seeks only civil contempt. However, civil contempt is not the proper procedural mechanism for enforcing a money judgment absent extraordinary circumstances not demonstrated here. The Court notes, however, that Defendant presented evidence of Plaintiff’s assets, including seven million shares of stock and real property located in France, which is currently the subject of a family law proceeding in California state court. Plaintiff had not presented this information previously, notwithstanding assertions that he lacked assets or income sufficient to pay the attorney’s fees awarded in this action.
Plaintiff addresses the Court regarding the conclusion of the family law proceeding and its final order allowing Plaintiff to sell the real property which is currently being processed by the French judiciary.
Plaintiff expresses his belief that the real property will be sold in six to nine months. Plaintiff also expresses his willingness to participate in a debtor’s examination and represents that he will be present in the United States and available for such an examination in June 2012.
Accordingly, the Court orders Plaintiff to participate in a debtor’s examination at a mutually agreed upon time and place during the period between June 13, 2012 and June 22, 2012. The Court sets defense counsel’s office as the default location if the parties cannot agree on another location. The Court orders Plaintiff to submit monthly updates in writing to defense counsel regarding the status of the French proceedings, each of which shall include a time estimate as to when the real property will be sold and the estimated net proceeds of the sale to Plaintiff and others. The first such update shall be submitted to defense counsel on or before April 30, 2012.
Independent of any contempt proceeding, the Court has authority to impose sanctions for bad faith, serious lack of cooperation with respect to, and/or intentional non-compliance with, a Court Order. The Court notes that this authority extends to the full amount of attorney’s fees sought, which in this matter is over $5,000. In its discretion, the Court imposes a $2,500 sanction based on the reasonableness of the fees incurred given the time spent, results achieved and hourly rates of counsel. Thus, such fees would not have been necessary absent Plaintiff’s conduct toward this Court’s Order that he pay certain attorney’s fees.
The payment of this sanction is stayed pending the conclusion of Plaintiff’s debtor’s examination. The Court sets a status conference for July 2, 2012 at 1:30 p.m., and will stay the entry of sanctions through that time. The parties are ordered to file a status report not to exceed three pages on or before June 27, 2012, apprising the Court of any new developments and the result of the debtor’s examination. If the debtor’s examination demonstrates that Plaintiff does not have the additional assets identified by Defendant, then Plaintiff can seek relief from the $2,500 sanction at that time.
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