November 15, 2013
JAMES YOHO, Appellant
ASBESTOS REMOVAL CONTROL, INC., Appellee JAMES YOHO, Appellant
ASBESTOS REMOVAL CONTROL, INC., Appellee
Appeal from the Order Entered September 20, 2012 In the Court of Common Pleas of Luzerne County Civil Division at No(s): 2011-13259
Appeal from the Order Entered September 13, 2012 In the Court of Common Pleas of Luzerne County Civil Division at No(s): 2011-13259
BEFORE: BOWES, OTT, and FITZGERALD, [*] JJ.
James Yoho appeals pro se from two orders denying his fourth and fifth contempt petitions filed in this action. After consideration of the facts and law, we reverse and remand.
On October 26, 2011, the present civil action was instituted when the Prothonotary of Luzerne County entered judgment in the amount of $3, 497 in favor of Appellant and against Asbestos Removal Control, Inc., Appellee. Judgment was entered based upon an award by a magisterial district judge that was not appealed by Appellee. Appellant, who has proceeded pro se throughout these proceedings, then filed a document entitled, "Verified Statement of and Praecipe to Serve Defendant at Last Known Mailing Address, " which contained the following averments. Appellee's record address was on South Third Street, Shamokin, which was its registered address with the Bureau of Corporations of the Pennsylvania Department of State as well as where Appellant achieved personal service during the proceedings before the magisterial district judge.
The Luzerne County prothonotary attempted to serve Appellee notice of the present case at that address, but the notice was returned as undeliverable and unable to forward. Appellant disseminated interrogatories in aid of execution at the South Third Street address, with the same result. Appellant believed that Appellee "intentionally disabled its ability to receive mail sent to its address of record." Verified Statement of and Praecipe to Serve Defendant at Last Known Mailing Address, 11/10/11, at ¶ 4. Appellant asked that the prothonotary be permitted to resend notice at an address where Appellee would receive actual notice. Specifically, Appellant averred that the address of Donna Deitrick, Appellee's sole owner and officer, was 123 Miller Lane, Shamokin, which Appellant knew "[b]y several means" to be "Ms. Deitrick's residence of long standing." Id. at ¶ 6. He also mailed a discovery request to that address, and it was not returned. Appellant thus asked that notice of this lawsuit be sent to Ms. Deitrick, as Appellee's sole owner and corporate officer, at the noted address.
The next document of record is a December 8, 2011 motion to compel discovery. Appellant averred that the present action was one to enforce a money judgment. On November 1, 2011, he served interrogatories and a request for production of documents to Ms. Deitrick at her residence, but those documents were not answered. On December 9, 2011, the court granted that motion and ordered Appellee to respond to the interrogatories and request for production and informed Ms. Deitrick that "as sole owner and operator of the Defendant corporation, she will be held responsible for effecting said compliance." Order of Court, 12/9/11, at 1.
On January 26, 2012, Appellant filed his first petition for contempt. While Ms. Deitrick had answered the interrogatories and request for production on behalf of Appellee, she failed to verify or execute those documents. The answers that Ms. Deitrick gave to the interrogatories indicated that Appellee had no assets other than an ownership interest in 27 North Carbon Street, Shamokin, and in 237 South Third Street, Shamokin. A rule was issued for Appellee to show cause why the contempt should not be granted, and it was returnable on February 27, 2012.
Before the first contempt matter was entertained, on February 15, 2012, Appellant filed a second motion to compel based upon Appellee's failure to answer a second request for documents and its improper response to Appellant's request for inspection. Specifically, Appellant had disseminated a request to inspect the real property that Appellee owned and to inspect its business records. Ms. Deitrick wrote answers to the request for inspection. Without offering a reason, she stated that she would not permit Appellant to view the properties in question. With respect to the business records, Ms. Deitrick, who signed a sworn verification that her answers to the request to inspect were true, indicated, "no records received [sic] or kept, due to no business [sic]." Requests for Inspection; Exhibit 2 to Motion to Compel, 2/15/12, at ¶ 3. A hearing was scheduled on Appellant's second motion to compel for March 12, 2012.
On February 27, 2012, the trial court granted the first petition for contempt, ordered that Appellee properly verify the first set of interrogatories and request for production, and imposed a fee of $500 against Appellee and in favor of Appellant to reimburse Appellant for his costs and expenses within thirty days of the order's entry. Appellant then issued numerous subpoenas to produce evidence in aid of execution. The subpoenas were directed to non-parties to this action to ascertain if Appellee had any bank accounts or other assets with them.
On March 12, 2012, the trial court granted Appellant's second motion to compel and ordered Appellee to answer the second request for production of documents and to amend its response to Appellant's request for inspection to either consent to a viewing of the real estate owned by it, or to raise a proper objection to that action. That same day, Appellant filed a verification that Ms. Deitrick was refusing to accept mail from him at her 123 Miller Lane address, and that mail sent to her residence was returned to the post office, indicating that the addressee had refused delivery.
On March 30, 2012, Appellant filed a second petition for contempt, receiving a rule returnable on May 7, 2012. Therein, he averred that Appellee was in violation of the February 27, 2012 order in that it had not answered Appellant's second request for production of documents, had failed to alter its answer to his request for inspection, and did not pay the entire $500 fine. Appellant additionally asked that contempt be issued based upon Ms. Deitrick's refusal to accept mail from him regarding this action. Appellant averred that Ms. Deitrick had sent Appellant four checks. The first one indicated in the memo line that it was sent on behalf of Appellee and was in the amount of $100; it was dated November 15, 2011. She sent three additional checks for $100 on December 20, 2011, February 1, 2012, and March 4, 2012. The memo lines indicated that they were the second, third, and fourth payments.
Before the second contempt petition was resolved, Appellant filed, on April 2, 2012, a third motion to compel. Therein, he sought an order compelling Ms. Deitrick to answer a subpoena that he sent to her in aid of execution. Appellant alleged the following. Appellee was worth $362, 000 when Ms. Deitrick acquired it on July 29, 2009. In the first set of discovery documents, Appellee admitted that it did not file income tax returns for 2009 and 2010 and had no assets other than a partial interest in two pieces of property. In response, Appellant served a subpoena in aid of execution to Ms. Deitrick personally to ascertain if she had improperly distributed those significant corporate assets and transferred them into her individual name to avoid execution on them. Personal service of the subpoena was attempted on Ms. Deitrick at her 123 Miller Lane residence. She came to the gate in front of the house and informed the Pennsylvania State Constable that she refused to accept the subpoena. The constable left the subpoena in the gate. As Ms. Deitrick did not respond to the subpoena, Appellant filed the motion to compel. The court took this contempt petition under advisement.
Before resolution of his second contempt petition, Appellant filed his third contempt petition based on Appellee's failure to respond to the March 12, 2012 order requiring it to answer the second request for production of documents and to amend its response to Appellant's request for inspection by either consenting to a viewing of the real estate owned by it or by raising a proper objection to such inspection.
On May 16, 2012, the second contempt petition was granted, and Appellee was found to have been in violation of the court's February 27, 2012 order. In the May 16, 2012 order, Appellee was ordered to file and serve by June 15, 2012, proper verifications for the interrogatories and request for production of documents. Appellee additionally was ordered to pay Appellant $400 by June 15, 2012, as expenses incurred in connection with his second contempt petition. A copy of the order was served upon Appellee by the prothonotary on May 22, 2012, by sending it to Ms. Deitrick in the mail and that mail was not returned to the prothonotary's office.
On June 25, 2012, Appellant filed a fourth contempt petition based upon Appellee's failure to comply with the May 16, 2012 order. He outlined all of Appellee's obdurate behavior, including Ms. Deitrick's refusal to accept service of various documents, Appellee's failure to respond to any petitions or appear at oral argument on the petitions, and Ms. Deitrick's failure to abide by court orders directed to her corporation. In the petition, Appellant asked both that Appellee be found in civil contempt and that Ms. Deitrick, as the sole owner and only officer of Appellee, be found personally responsible for Appellee's noncompliance with the orders of court.
Thereafter, on June 29, 2012, Appellant's third contempt petition was granted in part and denied in part. Appellee was directed by court order to serve Appellant answers to his request for production and request for inspection by July 28, 2012. The court declined to award any further costs to Appellant. After Appellee did not comply with this June 29, 2012 directive, Appellant filed a fifth contempt petition on August 1, 2012. Once again, Appellant asked that Appellee be held in contempt as well as that Ms. Deitrick, as the only owner and officer of Appellee, to be held personally responsible for Appellee's noncompliance with the court orders.
The fourth and fifth petitions were taken under advisement together. On September 13, 2012, the fifth petition for contempt was denied without prejudice and Appellant was told to "proceed with Default judgment and enforce said judgment by a Writ of Execution." Order, 9/13/12, at 1. On September 20, 2012, the fourth petition was granted in part and denied in part. Once again, Appellant was told to proceed with execution, but the trial court did indicate that the prior contempt orders, which were dated May 16, 2012, and February 27, 2012, remained in full force and effect, and that "the amount awarded as sanctions that remains unpaid shall be added to the amount of the Default Judgment." Order of Court, 9/20/12, at 1. However, Ms. Deitrick was not held personally accountable for Appellee's failure to comply with the numerous court orders directed to it. Further, the court concluded that Ms. Detrick was not required to comply with the subpoena left at her residence to help Appellant find corporate assets upon which to execute his judgment.
On October 13, 2012, Appellant filed the present, timely appeals from the September 13th and September 20th orders, respectively. After this appeal was filed, the Prothonotary of the Superior Court directed Appellee to notify this Court as to whether it intended to retain counsel for these appeals. There was no response, and Appellee did not file a brief in this appeal. Appellant presents these issues for our review:
A. Whether the trial court erred as a matter of law, and thus abused its discretion, by ruling that discovery cannot be propounded except "after or with the filing of a writ of execution" and thus effectively denying the petitions for contempt.
B. Whether the trial court erred as a matter of law, and thus abused its discretion, by, in effect, vacating five prior orders of the court.
C. Whether the trial court erred as a matter of law, and thus abused its discretion, by not granting judgment creditor an evidentiary hearing on his petitions for contempt.
D. Whether the trial court erred as a matter of law, and thus abused its discretion, by not finding debtor corporation to be in contempt on both petitions on the basis of the undisputed verified petitions for contempt.
E. Whether the trial court erred as a matter of law, and thus abused its discretion, by failing to hold the sole owner and officer of the debtor corporation personally responsible for the debtor corporation's compliance with the relevant orders of the court.
Appellant's brief at 5-6.
"In reviewing a trial court's finding on a contempt petition, we are limited to determining whether the trial court committed a clear abuse of discretion. This Court must place great reliance on the sound discretion of the trial judge when reviewing an order of contempt." P.H.D. v. R.R.D., 56 A.3d 702, 706 (Pa.Super. 2012) (quoting Flannery v. Iberti, 763 A.2d 927, 929 (Pa.Super. 2000)). In this case, we conclude that the trial court abused its discretion in refusing Appellant's request to find Ms. Deitrick in contempt for her failure to comply with the prior orders of court. We also find that she must appear before the court and offer a reason for her refusal to answer the subpoena left at her residence while she was present therein. Ms. Deitrick, as sole owner and president of Appellee, had the responsibility to ensure its compliance with the court orders in question. The trial court acknowledged this fact in one of its original rulings. Ms. Deitrick consistently demonstrated an egregious pattern of disregard for court proceedings and directives.
"[I]n proceedings for civil contempt of court, the general rule is that the burden of proof rests with the complaining party to demonstrate, by [a] preponderance of the evidence that the defendant is in noncompliance with a court order." Lachat v. Hinchcliffe, 769 A.2d 481, 488 (Pa.Super.2001). However, a mere showing of noncompliance with a court order, or even misconduct, is never sufficient alone to prove civil contempt." Id. Moreover, we recognize that:
To sustain a finding of civil contempt, the complainant must prove certain distinct elements: (1) that the contemnor had notice of the specific order or decree which he is alleged to have disobeyed; (2) that the act constituting the contemnor's violation was volitional; and (3) that the contemnor acted with wrongful intent.
Stahl v. Redcay, 897 A.2d 478, 489 (Pa.Super. 2006).
Habjan v. Habjan, 2013 WL 3832679, 5 (Pa.Super. 2013).
The record supports that Ms. Deitrick had actual notice of these proceedings and has displayed a total disregard for our judicial process. Indeed, both petitions for contempt denied by the court went unanswered. The unrefuted allegations in his fourth petition for contempt indicate that in 2009, the corporation had assets of $362, 000, while Ms. Deitrick admitted that no corporate income tax returns were filed for 2009 and 2010. Furthermore, when Ms. Deitrick answered the request for inspection, which she properly verified as having been made subject to penalties of 18 Pa.C.S. § 4904 (relating to unsworn falsification to authorities), she said that there were no corporate records to inspect.
We find Harcar v. Harcar, 982 A.2d 1230, 1241 (Pa.Super. 2009), instructive. Therein, a child's mother took the child to another country for vacation, but did not return to the United States after the vacation was concluded, as required by a court order. The court issued a second order mandating that she return with the child, but she also disregarded that order. While the trial court found mother in contempt, it refused to impose any sanctions on her. The father appealed, and we affirmed the contempt finding but reversed the omission of sanctions. Therein, we noted, "The contempt power is essential to the preservation of the court's authority and prevents the administration of justice from falling into disrepute." Id. at 1235 (citation omitted). We observed that the mother had knowingly violated two orders of court, thus sustaining the contempt determination. We continued that it was an abuse of discretion not to sanction her for "her flagrant contempt" of the orders of court. Id. at 1240.
The actions of Ms. Deitrick are comparable to those of the mother in Harcar. She continually ignored the lawful process of court and refuses to comply with orders obtained by Appellant and directed against a corporation of which she is the sole owner and officer. She refused to answer a subpoena lawfully promulgated in an attempt to find assets upon which Appellant can execute. The trial court's decision to allow her contempt of these judicial proceedings to go unpunished undermines the judicial process.
The trial court herein refused to issue any sanctions against Ms. Deitrick personally based on the rationale that it could not pierce the corporate veil. However, as Appellant notes in his appellate brief, a corporate officer can be held personally liable for contempt when that officer is responsible for the corporation's failure to comply with directives from the court. In City of Scranton v. Peoples Coal Co., 117 A. 673 (Pa. 1922), the Court addressed whether an officer of a corporation could be found personally in contempt for the corporation's violation of a court order. In answering in the affirmative, our Supreme Court noted:
As the corporation can only act through its agents, the courts will operate upon the agents through the corporation. Although the command is in form to the board, it may be enforced against those through whom alone it can be obeyed. While the board is proceeded against in its corporate capacity, the individual members are punished in their natural capacities for failure to do what the law requires of them as the representatives of the corporation.'
Id. at 677 (quoting Wilson v. United States, 221 U.S. 361 (1911) (involving a proceeding against the president of a corporation for his refusal to produce documents required by a subpoena issued against the company)). Our Supreme Court ruled that officers of a corporation who have personal knowledge of an order directed against their corporation and who violate that order are punishable for the corporate default. See also Woods v. Dunlop, 334 A.2d 619 (Pa. 1975) (affirming finding of contempt entered against the president of a corporation due to president's violation of a court order requiring him to identify certain corporate documents; the trial court ordered the president to be jailed until he purged himself by complying with the order). Hence, the trial court committed an error of law in concluding that Ms. Deitrick cannot be personally responsible for her corporation's failure to comply with the lawful orders of court.
The trial court also refused to issue a contempt finding due to the Appellee's failure to comply with discovery requests. The trial court reasoned that Appellant had improperly attempted to gain discovery of assets upon which to execute by failing to first obtain a writ of execution. As Appellant indicates in his brief, this position is incorrect. Pa.R.C.P. 3117(a) (emphasis added), discovery in aid of execution, provides:
(a) Plaintiff at any time after judgment, before or after the issuance of a writ of execution, may, for the purpose of discovery of assets of the defendant, take the testimony of any person, including a defendant or a garnishee, upon oral examination or written interrogatories as provided by the rules relating to Depositions and Discovery. The prothonotary of the county in which judgment has been entered or of the county within this Commonwealth where the deposition is to be taken, shall issue a subpoena to testify.
As we noted in PaineWebber, Inc. v. Devin, 658 A.2d 409 (Pa.Super. 1995), discovery in aid of execution under Pa.R.C.P. 3117 is "intended as an ancillary aid in the discovery of assets." Id. at 412. We specifically observed in that decision that discovery under Pa.R.C.P. 3117 can be secured at any point after a judgment is obtained, including before the issuance of a writ of execution. We continued, "Discovery in aid of execution thus is not linked to a pending execution or attachment, but rather may be pursued even before issuance of a writ in order to locate assets subject to execution and obtain the information necessary to begin the process of execution or attachment." Id. We held that under the rule a judgment creditor "may seek discovery from any person who may have information regarding the location of assets of the judgment debtor." Id. at 413 (emphasis added). We also held that the discovery available to the judgment creditor includes the use of any type of available discovery:
The range of discovery tools available to plaintiffs under Rule 3117 is also broad. The rule explicitly permits plaintiffs to conduct discovery by oral examination or written interrogatories "as provided by the rules relating to Depositions and Discovery." Thus the mechanisms and procedures set out in Rules 4004 through 4006 (relating to written interrogatories) and in Rules 4007.1 through 4008 (relating to oral examinations) are available not only in preparation for trial, but also in aid of execution.
Id. Thus, despite the absence of a writ of execution, Ms. Dietrick as well as Appellee must comply with Appellant's attempts to find assets upon which to execute his judgment.
Thus, on appeal, Appellant has established that both grounds offered by the trial court in refusing to issue contempt findings were legally erroneous. Additionally, the facts herein unquestionably establish that Ms. Deitrick, as the sole corporate officer, has violated clear directives of the court and that she had notice of the orders in question. Hence, we are compelled to reverse.
Order s reversed. Case remanded with instructions. Jurisdiction relinquished.