5th Circ. Finds Atty Who Didn’t Pay Fine Deserves Contempt

February 9, 2015 – In The News

Mark A. Goodman and Michael S. Rumac were featured in the Law360 article “5th Circ. Finds Atty Who Didn't Pay Fine Deserves Contempt.” Full text can be found in the February 9, 2015, issue, but a synopsis is below.

The Fifth Circuit recently affirmed a bankruptcy court’s civil contempt order against Texas attorney for failing to pay a $25,000 sanction, rejecting the attorney’s argument that a contempt order for failure to pay sanctions violates the prohibition on imprisonment for a debt.

The motion for contempt asked for monetary sanctions and the attorney was never imprisoned or even threatened with imprisonment, the appellate panel found. The panel affirmed a Texas bankruptcy court order that held the attorney in contempt of court for failing to win a stay of a $5,000 and a $20,000 sanction in an underlying bankruptcy case, then failing to post bond or pay the sanctions as she appealed them first to the district court, then the Fifth Circuit and finally the U.S. Supreme Court.

The panel characterized the matter as an “unseemly case” and ordered the attorney to pay the $25,000 plus an additional $6,500 in costs incurred by landlord Coventry II DDR/Trademark Montgomery Farm LP, which had sought to collect unpaid rent from her in the underlying bankruptcy case.

Mark Goodman and Michael Rumac, attorneys for Coventry II DDR, said they’d never before experienced behavior like the attorney’s, pointing to a Texas bankruptcy judge’s ruling that said the attorney had “thumbed her nose” at the judicial system through her actions.

“This has been a long road for our client, and I think they’re happy that they’re finally getting some closure. The courts found that the attorney does owe this money and they would ultimately like to collect it,” Rumac said.

Coventry II DDR is represented by Mark Goodman and Michael Rumac of Fox Rothschild LLP.