Judge: Richard Y. Lee, Case: 2022-01253452, Date: 2022-08-22 Tentative Ruling
Motion for Order to Show Cause re: Contempt
The Motion for Order to Show Cause re: Contempt is DENIED without prejudice.
Plaintiffs Michelle Arlene Talley Ellsworth, Christian Horner Talley, Denise Suzanne Talley Rall, and Julie Ann Talley Allen move for an order to show cause why Defendants and Defendants’ counsel, Douglas Weeks, Esq., should not be held in contempt for violating the temporary restraining order issued April 8, 2022 and the preliminary injunction issued May 9, 2022.
Plaintiff’s motion requests that the Court issue an Order to Show Cause re: Contempt, rather than make a finding that Defendants and Defendants’ counsel are in contempt. The threshold issue is thus whether Plaintiff’s allegations are sufficient to support a showing of contempt. (fn.1)
In order to make out indirect contempt (i.e., alleged contempt that is not committed in the immediate view and presence of the court), Plaintiffs must show: 1) the rendition of a valid order; 2) respondent's actual knowledge of the order; 3) respondent's ability to comply with the order; and 4) respondent's willful disobedience of the order. (Conn v. Superior Court (1987) 196 Cal.App.3d 774, 784.)
Valid Order
The Court issued a valid order on April 8, 2022 – the Temporary Restraining Order (TRO), which enjoined Defendants from “proceeding to close any transaction involving the sale, transfer or conveyance” of the Anaheim property and from “spending, using, or dissipating any portion of the $500,000 borrowed by the JP Erb Trust in a refinance / cash out transaction.” (ROA 26.) The sale of the Anaheim property closed on April 15, 2022. (Ballo Dec., Exh. A, ROA 81.)
The Court also granted a preliminary injunction on May 9, 2022. (ROA 69.) Plaintiffs, however, point to no specific order made in the preliminary injunction that was violated by the Defendants. The preliminary injunction cannot be a basis for indirect contempt. (See Koshak v. Malek (2011) 200 Cal.App.4th 1540, 1549 [contempt requires that order violated “be clear, specific, and unequivocal”]; In re Blaze (1969) 271 Cal.App.2d 210, 212 “Any ambiguity in a decree or order must be resolved in favor of the alleged contemnor.”
Actual Knowledge
Plaintiffs contend that Defendant Jay P. Erb had actual and constructive knowledge of the TRO before the Property sold on April 15, 2022. Defendant Jay P. Erb states in his declaration that he was not served with any court order until after the sale of the Anaheim Property. (Erb Dec., ¶ 5.) But Defendants do not point to any requirement that the TRO be personally served in order to be valid. Instead, actual knowledge, not personal service, is what must be proved.
Plaintiffs provide evidence that their counsel, Brian Ballo, sent an email to Defendants notifying them of the TRO on 4/8/2022. (Ballo Dec., ¶ 5.) This email is attached as Exhibit 2 to the declaration of Douglas Weeks filed on April 19, 2022. (ROA 33.) In the email, Mr. Ballo stated: “Today, Judge Lewis granted Plaintiffs Ex Parte Application for TRO enjoining the pending sale of the Rural Ridge property from closing and, that the $500,000 refinance proceeds be held. [¶] The Order also sets a May 9, 2022, hearing, at which time you are ordered you [sic] to Show Cause why a Preliminary Injunction should not issue. See the attached Notice of Order and attached Order. [¶] I need to hear from each of you ASAP that you will comply with Judge Lewis’s Order, in particular, that the buyer in the pending escrow has also been notified of this Order. Finally, I also would appreciate hearing from each you [sic] as to your proposals for resolving this dispute.” This email was sent to 1jperb@gmail.com, shaunee@mac.com, and jessie@firstreliancerealty.com. (Id.) Plaintiffs have sufficiently shown that Defendant Erb had actual knowledge of the TRO prior to April 15, 2022.
As to Defendant Jessie Sioson and Defendant Ilderosa Enterprises, Inc., Defendant Sioson has provided a declaration stating that she was visiting family in Oregon until April 18, 2022; that she was not served until after April 18, 2022; that she did not read her email while she was on vacation; and she was not aware of the TRO until she spoke with Mr. Weeks on April 15, 2022. (Sioson Dec., ¶ 3.)
Plaintiffs provide no evidence that Defendant Sioson had actual knowledge of the TRO. Instead, Plaintiffs contend that, because Defendant Sioson and Defendant Ilderosa were agents of the other Defendants, they were required to comply with the TRO. It may be true that they were required to comply with the TRO, but that does not show that they had actual knowledge of the TRO. Plaintiffs have not met their burden of establishing that Defendant Sioson and Defendant Ilderosa had actual knowledge of the TRO prior to April 15, 2022.
As to Defendant Asuncion Mariano Orteza aka Shaunee Orteza, Defendant Orteza has provided a declaration stating that she was not even served with the TRO, preliminary injunction or the Complaint until April 15, 2022, after the sale had closed. (Orteza Dec., ¶¶ 16-19.)
To prove the contrary, Plaintiffs rely on a declaration by Defendants’ counsel Weeks stating that Ms. Orteza forwarded to Mr. Weeks an email she received from Plaintiffs’ counsel, Mr. Ballo. (ROA 33.) Defendant Orteza states in her declaration, however, that she did not read Plaintiff Counsel Ballo’s email or even open it; instead, she merely forwarded it to Mr. Weeks who she understood to be Defendant Erb’s counsel.
Defendant Orteza states that she had no knowledge at any time prior to April 15, 2022 at 1:51 p.m. that there was any court order specifically directed to her in this matter. (Orteza Dec., ¶ 20.) Plaintiffs do not present any evidence to rebut this portion of Defendant Orteza’s declaration. Plaintiffs have not met their burden of establishing that Defendant Orteza had actual knowledge of the TRO prior to April 15, 2022.
As to Defendants’ counsel Douglas Weeks, he conceded he had actual knowledge of the TRO prior to April 15, 2022 as he obtained copies of the ex parte application and TRO on April 11, 2022. (ROA 33, ¶ 5.)
Ability to Comply and Willful Disobedience.
The burden of proof is on the moving party to prove the respondent's ability to comply (rather than on the respondent to prove inability). (See In re Cassil (1995) 37 Cal.App.4th 1081, 1087 fn. 1; In re Koehler, supra, 181 Cal.App.4th at 1160.)
Defendant Jay P. Erb states in his declaration that he “did not have the ability to obey most of [the Court’s order] and was not provided timely due process of the law to allow me to read and understand it.” (Erb Dec. at ¶ 6.) Specifically, Defendant Erb claims that he “did not have the ability to comply with the April 8, 2022 order that says I am to deposit the Ilderosa swing loan proceeds into court. Those loan proceeds were not in my possession or control. On February 24, 2022, I used those loan proceeds in my purchase of the Menifee property. The Menifee purchase closed on March 3, 2022. Plaintiff filed this lawsuit the first week in April 2022. We vacated the Anaheim property and moved into the Menifee property in March 2022. The Ilderosa loan proceeds were long gone by April 8, 2022. Those loan proceeds are in the Menifee property.” (Id. at ¶ 7.)
Defendant Erb also states that, on April 15, 2022, he understood that the Plaintiffs had agreed that the sale of the Anaheim property should close, so he “believed everything was okay. [He] did nothing after April 8 to proceed with the sale. . . . The Anaheim sale closed with no action on my part on April 15, 2022.” (Id. at ¶ 10.) However, the respondent’s subjective belief that they are complying with the order is not sufficient; the court must apply an objective standard. (Taggart v. Lorenzen (2019) 139 S.Ct. 1796, 1802.)
Further, the concepts of ability and willfull disobedience are intertwined. A moving party may show willfull disobedience by showing that the respondent could have complied but knowingly chose not to. (See Little v. Superior Court (1968) 260 Cal.App.2d 311, 319; Oliver v. Superior Court (1961) 197 Cal.App.2d 237, 240.) In this case, Plaintiffs have not alleged any facts to show that, even assuming Defendant Erb learned of the TRO prior to the April 15, 2022 closing, he had the ability to stop the sale of the Anaheim property after he learned of the TRO.
Plaintiffs also provide no evidence that any of the other defendants or Defendants’ Counsel Weeks had the ability to comply or acted in willfull disobedience of the TRO. For example, Defendant’s Counsel Weeks provided evidence that, by April 15, 2022, he did not know who the escrow holder was and instead assumed that Plaintiff’s Counsel Ballo had notified the escrow holder of the TRO. (Weeks Dec., ¶ 5.) Further, Mr. Weeks was under the impression that the issues had been resolved when the attorneys agreed that the net proceeds would be safeguarded pursuant to a stipulation, which Mr. Weeks prepared. (Id., ¶ 6.) Plaintiffs have not met their burden of proving that Defendants had the ability to comply with the TRO and nonetheless willfully disobeyed the TRO.
Defendants shall provide notice of this ruling.
(fn.1) Because contempt proceedings are quasi-criminal, the respondent or citee possesses many of the rights of a criminal defendant. (See People v. Gonzalez (1996) 12 Cal. 4th 804, 816; In re Kreitman (1995) 40 Cal.App.4th 750, 753.) The alleged contemner must be arraigned (advised of charges) at the beginning of the contempt hearing, may be entitled to appointed counsel if they are not able to retain counsel, and is presumed innocent until proven guilty beyond a reasonable doubt. Live testimony is required from witnesses against the alleged contemner, to ensure their right to cross-examine. (See Civil Procedure Code, § 1217 [judge “must hear any answer” which contempt citee may make and “may examine witnesses for or against him”].) Testimonial and self-incrimination privileges apply (including the right not to testify at all and not to incriminate self). Thus, no finding of contempt may be made until the respondent is provided with the full protections of the law, including the opportunity to respond, call witnesses, and present evidence.