WESTERN STATES INSULATORS AND ALLIED WORKERS PENSION PLAN, et al., Plaintiffs,
JENCO MECHANICAL INSULATION, INC., Defendant.
ORDER GRANTING PLAINTIFFS' MOTION TO HOLD DEFENDANT AND ITS PRESIDENT IN CONTEMPT
(Docket No. 48)
EDWARD M. CHEN, District Judge.
Pending before the Court is Plaintiffs' motion to hold Defendant and its president, Scott Jenson, in contempt for failure to comply with this Court's August 31, 2013 partial judgment. The August 31, 2013 judgment ordered Defendant to produce its books and records for the period of January 2006 to August 2010 to allow Plaintiffs to review the books and perform an audit. After some initial difficulty effecting service, Defendant was served with the judgment on October 5, 2012. Though Mr. Jenson was not personally served with the judgment, it would appear from Plaintiffs' communications with one of Defendant's employees that Mr. Jenson is aware of the judgment. Despite some subsequent communications with one of Defendant's employees, Defendant has yet to comply with the Court's order. Neither Defendant nor Mr. Jenson responded to the instant motion, or appeared at the May 16, 2013 hearing. II. FACTUAL & PROCEDURAL BACKGROUND
Plaintiffs filed this ERISA case on January 12, 2011, alleging that Defendant had refused to submit to an audit that is required under the terms of the applicable Trust Agreement and Collective Bargaining Agreement. Docket No. 1. The complaint sought an injunction compelling Defendant to submit to an audit for the period of time between January 2006 and August 2010, and an order compelling Defendant to pay all money found owed upon completion of the audit, as well as various fees, costs and other damages. On March 9, 2011, the Court extended the deadline to file an answer to March 17, 2011 by stipulation of the parties. Docket No. 7. Plaintiffs later requested a further extension of the deadline for Defendant's answer to July 20, 2011, indicating that Defendant had contacted Plaintiffs indicating a willingness to voluntarily submit to an audit. The Court granted the request. Docket No. 11.
Defendant did not ultimately submit to the audit, nor did it file an answer by July 20, 2011. Plaintiffs then sought and obtained entry of default on July 25, 2011. Docket No. 17. Plaintiffs filed a motion for default judgment on December 30, 2011, requesting an injunction compelling Defendant to submit to an audit. Docket No. 21. After supplemental briefing ordered by the Court, Plaintiffs' motion was granted on April 3, 2012. Docket No. 36. The Court found that Plaintiffs had effected proper service of the summons and complaint on Defendant by serving Jenson, who is a registered agent for Defendant, on February 9, 2011. Id. at 3. The Court further found that Plaintiffs properly served Defendant with the motion for default judgment by mail. Id. Defendant did not file a response to the motion or appear at the hearing. Docket No. 35. In order to retain jurisdiction over any post-audit request for money damages, the Court delayed entry of judgment for 90 days. Docket No. 36 at 7.
Plaintiffs thereafter filed a motion for reconsideration with leave of the Court, asking the Court to modify the April 3, 2012 order to provide for the entry of partial judgment against Defendant so that such judgment could be registered with the District of Idaho, where Defendant is located. Docket No. 40. Plaintiffs also served the motion on Defendant via mail. Docket No. 40 at 4. Defendant again did not respond to the motion, and this Court granted the motion on August 30, 2012. Id. On August 31, 2012, the Court entered partial judgment enjoining Defendant to produce its books and records for the period of January 2006 to August 2010 to allow Plaintiffs to conduct a review and audit of the records. Docket No. 43. Defendant was required to produce the records within 30 days of the date of entry of the judgment. Id. Plaintiffs were to serve a copy of the partial judgment on Defendant. Id.
On September 4, 2012, Plaintiffs' counsel retained a process server to serve the order granting reconsideration and the order of partial judgment on Defendant. Declaration of Donna L. Kirchner ("Kirchner Decl, ") § 2 (Docket No. 48-1). After some initial difficulty serving Defendant, effected service on Defendant at its business address on October 5, 2012. Kirchner Decl. § 3, Ex. B. Shortly thereafter, Plaintiffs' counsel received a phone call from Defendant's former counsel, Patrick Duffin. Id. § 4. Believing Mr. Duffin to represent Defendant, Plaintiffs' counsel subsequently made some efforts to arrange an audit with him, but ultimately discovered that he had resigned his bar membership in lieu of discipline. Id. Since she then understood Defendant to be unrepresented, she sent a demand for the audit to Defendant at its business address directly by both certified and first class mail. Id. The first class mail was not returned, but the certified mail was returned "unclaimed." Id.
On March 19, 2013, Plaintiffs' counsel attempted to reach Defendant by telephone, and left a voice mail message. Id. § 5. Mr. Duffin returned her call, and indicated that though he was no longer Defendant's counsel, he was working for Defendant in a non-attorney capacity. Id. He indicated that he would talk to Defendant's president, Scott Jenson, about complying with the order. Id. He indicated, however, that Mr. Jenson wished to only provide documents for the employees for whom he believed Defendant was required to make contributions to the Pension Fund. Id. Plaintiffs' counsel indicated that this was unacceptable, that the Court's order contained no such limitation, and that the purpose of the audit was in part to review the records to ensure that Defendant was making contributions for all covered employees. Id. After this conversation, Plaintiffs' counsel sent copies of the partial judgment and the prior communications with Defendant to Mr. Duffin via email. Id. § 5, Ex. D. In that email, she indicated that if Defendant did not forward the appropriate records by March 27, Plaintiffs would initiate contempt proceedings. Id. Ex. D. Plaintiffs have not received any documents or other communication from Defendant or Mr. Duffin since that email. Id. § 6.
Plaintiffs filed the instant motion on April 1, 2013. Docket No. 48. Plaintiffs seek an order holding Defendant and Mr. Jenson in contempt for failing to comply with the partial judgment entered on August 31, 2012, and imposing coercive monetary sanctions of $100 per day until Defendant produces the records. Additionally, in the event that Defendant fails to purge the contempt within 10 days, Plaintiffs seek issuance of a writ of body attachment for the incarceration of Scott Jenson until the contempt is purged. Plaintiffs have filed a proof of service indicating that (1) Defendant was served with the instant motion at its business address via mail on April 2, 2013; (2) Plaintiffs' counsel emailed a courtesy copy of the motion to Mr. Duffin; and (3) the motion was sent to a process server to effect personal service on Mr. Jenson. Docket No. 49. At the hearing on this motion, Plaintiffs' counsel indicated that attempts to personally serve Mr. Jenson at his place of business have been unsuccessful. Plaintiffs have not attempted personal service on Mr. Jenson at his place of residence. Neither Defendant nor Mr. Jenson responded to the instant motion, or appeared at the hearing.
Civil contempt consists of "a party's disobedience to a specific and definite court order by failure to take all reasonable steps within the party's power to comply." Reno Air Racing Ass'n, Inc. v. McCord , 452 F.3d 1126, 1130 (9th Cir. 2006). The Ninth Circuit has recognized that
The contempt "need not be willful, " and there is no good faith exception to the requirement of obedience to a court order. But a person should not be held in contempt if his action "appears to be based on a good faith and reasonable interpretation of the [court's order].'" "Substantial compliance" with the court order is a defense to civil contempt, and is not vitiated by "a few technical violations" where every reasonable effort has been made to comply.
The party alleging civil contempt must demonstrate that the alleged contemnor violated the court's order by "clear and convincing evidence, " not merely a preponderance of the evidence.
Go-Video v. Motion Picture Ass'n of Am. , 10 F.3d 693, 695 (9th Cir.1993). More recently, in Labor/Community Strategy Ctr. v. Los Angeles County Metro. Transp. Auth ., 564 F.3d 1115, 1123 (9th Cir.2009), the Ninth Circuit reiterated that, for issuance of a contempt order to be proper, the moving party "must establish (1) that [the nonmoving party] violated the court order, (2) beyond substantial compliance, (3) not ...