Monday, February 26, 2018

Contempt Affirmed

An order of the United States District Court for the District of Columbia (Judge Amy Berman Jackson) affirms a contempt finding against an attorney.

Plaintiff District Title, a real estate settlement company, was handling the sale of a property formerly owned by defendant Anita K. Warren when it erroneously transferred $293,514.44 to Warren instead of the mortgage lender, Wells Fargo Bank, N.A. Am. Compl. [Dkt. # 5] ¶ 15. Warren promptly transferred the funds to her son Timothy Day, and the two refused to give the money back. See District Title v. Warren, No. 14-1808, 2015 WL 7180200, at *1 (D.D.C. Nov. 13, 2015). District Title sued, and attorney LeFande represented the defendants in that action.

After the plaintiffs prevailed

On March 22, 2016, plaintiff filed a motion to conduct post-judgment discovery related to its efforts to collect on the judgment, which included a request for court permission to serve subpoenas on three individuals, including LeFande. See Mem. of P. & A. in Supp. of Pl.’s Mot. for Oral Examination of J. Debtor Timothy Day & Third Parties, & for Leave to Serve Subpoenas [Dkt. # 88-1]. Plaintiff asserted that LeFande “may have information concerning assets held or transferred by Timothy Day.” Id. at 5.

The matter was referred to a magistrate judge and a motion for contempt was filed

In support of its motion, plaintiff pointed to testimony in a related proceeding in a Maryland state court that suggested that LeFande was complicit in the concealment of defendant Day’s assets. Pl.’s Mem. of P. & A. in Supp. of Pl.’s Mot. [Dkt. # 107- 1] (“Pl.’s Mem.”) at 3. Plaintiff proffered that Day transferred over $80,000 in profits received from a November 2014 sale of property in St. Mary’s County, Maryland to an account in New Zealand. Id. At a trial related to the St. Mary’s County transaction, a witness testified that it was Day’s attorney, Matthew LeFande, who instructed the settlement company to transfer the funds to the New Zealand account. Id.

LeFande opposed the motion and sought a protective order. Opp. to Pl.’s Mot. & Request for Protective Order [Dkt. # 108] (“LeFande’s Opp.”). In his opposition, LeFande asserted his Fifth Amendment right against self-incrimination, and he also asserted that any testimony would be covered by the attorney-client privilege. Id. 

The magistrate judge directed that he appear for deposition and assert any privilege on a question-by-question basis.

He failed to appear and was ordered to be deposed before the magistrate judge, was held in contempt and appealed to the district court

On the date of the deposition, LeFande appeared in Magistrate Judge’s courtroom with his counsel, but he refused to comply with the Magistrate Judge’s order to take the stand and to be sworn. Minute Entry and Order (Sept. 21, 2017); Criminal Contempt Order at 2. The Magistrate Judge “repeated the order at least twice, and each time, Mr. LeFande refused to comply.” Id. His “response in each instance was to assert that he would not comply . . . and to invoke the Fifth Amendment.” Id. The Magistrate Judge took a brief recess to allow LeFande to further confer with counsel. Id. at 3. But after the recess, LeFande again refused to comply with the Magistrate Judge’s orders to take the stand and be sworn. Id.

Consequently, the Magistrate Judge held LeFande in criminal contempt for “obstructing the administration of justice” pursuant to her authority under 28 U.S.C. § 636(e)(2) and she fined him $5,000.00, payable no later than October 5, 2017. Criminal Contempt Order at 3–4. On October 03, 2017, LeFande filed objections to the Magistrate Judge’s bench ruling and Contempt Order, and he renewed his request for a protective order. Obj. to Contempt Order. Because LeFande violated multiple orders that he appear at the deposition and respond to questions, interposing any privilege objections on a question-by-question basis, LeFande’s objections will be overruled, and the Court will uphold the judgment of criminal contempt...

LeFande challenges the Magistrate Judge’s Criminal Contempt Order in a scattershot fashion, recycling many of the same arguments already presented to and rejected by this Court, including his invocation of the Fifth Amendment and attorney-client privileges. Obj. to Contempt Order at 16–23, 28–30. As this Court has explicitly stated in its prior Memorandum Opinion and subsequent Minute Order, LeFande may not avoid appearing at the deposition entirely with a blanket assertion of attorney-client privilege. Dist. Title v. Warren, 265 F. Supp. 3d 17, 23 (D.D.C. 2017); Minute Order (Sept. 18, 2017). LeFande was required to take the stand and to assert both the Fifth Amendment privilege and the attorney-client privilege on a question-by-question basis. Id.

The court found 

The Court finds that all of the elements required to uphold the criminal contempt order are satisfied here. In accordance with Rule 42 of the Federal Rules of Criminal Procedure, the Magistrate Judge witnessed first-hand LeFande’s misbehavior in her courtroom, she recited those facts in her contempt order, signed the order, and filed it with the clerk. Under 28 U.S.C. § 636(e)(2) the Magistrate Judge appropriately exercised her criminal contempt authority because LeFande’s actions “constituted misbehavior” that “obstruct[ed] the administration justice.” 28 U.S.C. § 636(e)(2). He not only disobeyed the Magistrate Judge’s multiple orders in the courtroom in her presence, but he also failed to comply with the opinions and orders of this Court which required him to appear and to respond to the questions on an individual basis. Lefande’s violation of these orders impeded the administration of justice by making it impossible for the plaintiff to conduct post-judgment discovery. Finally, the Court finds that the evidence recited in the Magistrate Judge’s Criminal Contempt Order is sufficient to establish beyond a reasonable doubt that LeFande had the necessary intent, and that his actions were “both calculated and willful.” Criminal Contempt Order at 3. Indeed, LeFande informed the Magistrate Judge through his counsel that he would rather “take the risk of going to jail” than comply with her orders. 

(Mike Frisch)

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Posted by: William Ramos | Feb 27, 2018 1:19:03 AM

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