Many initial pleadings in the Commercial Division are accompanied by an Order to Show Cause seeking to enjoin something, by virtue of an application for a preliminary injunction and, possibly, a temporary restraining order until the preliminary injunction application is resolved. Ultimately an application is resolved either by a negotiated stipulation between counsel or a Court-imposed Order, and the litigation continues thereafter while the parties are subject to the Order. Assuming one party alleges that an adversary violated the Order, and notwithstanding whether the purported violation was procured by ignorance, honest mistake, or intentionally, a litigant faces potentially dire consequences for civil contempt.
Judiciary Law § 753
Applications for civil contempt are governed by Judiciary Law § 753 which provides, in pertinent part:
§ 753. Power of courts to punish for civil contempt
A. A court of record has power to punish, by fine and imprisonment, or either, a neglect or violation of duty, or other misconduct, by which a right or remedy of a party to a civil action or special proceeding, pending in the court may be defeated, impaired, impeded, or prejudiced, in any of the following cases: …
3. … or for any other disobedience to a lawful mandate of the court.
A request to punish for civil contempt is addressed to the sound discretion of the court. Matter of Fishel v. New York State Div. of Housing and Community Renewal, 172 A.D.2d 835, 569 N.Y.S.2d 201 (2nd Dept 1991). One asserting a civil contempt claim has the burden of establishing contempt by clear and convincing evidence. Romanello v. Davis, 49 A.D.3d 652, 856 N.Y.S.2d 128 (2nd Dep’t 2008). In order to obtain a civil contempt finding under Judiciary Law § 753(a), it is necessary to establish that: (1) there was an unequivocal and lawful mandate or order from the court in effect; (2) it is reasonably certain that the order has been disobeyed; (3) the party to be held in contempt had knowledge of the order even if it was not served upon him; and (4) the rights of a party to litigation have been prejudiced. Matter of McCormick v. Axelrod, 59 N.Y.2d 574, at 583 (1983).
Two of the four foregoing elements are rather perfunctory, requiring minimal analysis. First, the issue of whether there is an Order in effect requires little discussion since a stipulation which has been “So Ordered” by the Court constitutes a lawful Order of the Court. See, e.g., Fuerst v. Fuerst, 131 A.D.2d 426, 515 N.Y.S.2d 862 (2nd Dep’t 1987) (the court’s “So Ordering” of a stipulation avoided the necessity of a written order with notice of entry). The third prong, knowledge of the Order, may likewise warrant concession, resulting in the pursuit or defense of a contempt charge resting on elements two and four.
It is not necessary that the disobedience be deliberate to sustain a finding of civil contempt; rather, the mere act of disobedience, regardless of its motive, is sufficient if such disobedience defeats, impairs, impedes or prejudices the rights of a party. Incorporated Village of Plandome Manor v. Ioannou, 54 A.D.3d 365, 862 N.Y.S.2d 592 (2nd Dep’t 2008).
In most instances, a hearing is necessary to determine whether the Court Order has been disobeyed and likewise whether certain rights have been prejudiced. In that vein, an application to adjudicate a party in contempt is treated in the same fashion as motion, and a hearing must be held if issues of fact are raised; to the contrary, a hearing is not necessary when there is no factual dispute. Quantum Heating Services Inc. v. Austern, 100 A.D.2d 843, 474 N.Y.S.2d 81 (2nd Dep’t 1984).
Element Two: Disobedience of the Order
The bright-line issue for the Court will be whether an Order has been violated and the contempt proponent must confirm at the hearing, through testimony or documentary evidence, that the adversary indeed violated an explicit Court Order. In that realm, the Order must be unequivocal. See, e.g., Gerelli Ins. Agency, Inc. v. Gerelli, 23 A.D.3d 341, 806 N.Y.S.2d 71 (2nd Dep’t 2005)(defendants could not be held in contempt for allegedly violating a court order that failed to indicate clearly that preliminary injunction was being granted or to specify precisely what action or actions were being enjoined); see also Katz v. Katz, 55 A.D.3d 680, 867 N.Y.S.2d 100 (2nd Dep’t 2008)(husband did not demonstrate that wife should be held in contempt of a So-Ordered stipulation, the language of which was not a clear and unequivocal mandate directing her to vacate the marital residence; stipulation predicated wife’s obligation to vacate marital residence upon husband’s resolution of problems with replacement residence, and husband failed to demonstrate that he discharged that obligation). At this time, counsel’s initial investment of time with the client, prior to negotiating the So Ordered Stipulation, will bear fruit when the hearing confirms that the So Ordered Stipulation was sufficiently explicit and drafted with an eye on protecting the client from an adversary’s interference.
Element Four: Whether a Party’s Rights Have Been Impaired
Ideally, prior to the hearing, counsel will have an opportunity to conduct some limited pre-hearing discovery on the contempt allegation in order to flesh out the basis for the claim. The party asserting a contempt allegation must substantiate some prejudice or loss resulting from the contempt. Inasmuch as it is black letter law that Courts generally will not award damages for minimal losses, any penalty imposed for contempt must be designed not to punish but to compensate the injured party, to coerce compliance with the court’s mandate, or both. In re Peer, 50 A.D.3d 1511, 856 N.Y.S.2d 385 (4th Dep’t 2008). It is imperative to substantiate the nexus between the alleged contempt and actual damages sustained. At this stage, savvy counsel will prepare the client to explicitly delineate all of the harm that he or she has incurred as a result of the contempt. Conversely, counsel for the party defending the contempt charge must explore, in detail, all of the areas of potential harm which the adversary claims from the contempt and will keep in mind that attorney fees awarded as sanction for civil contempt are limited to those incurred as result of allegedly contemptuous conduct. Clinton Corner H.D.F.C. v. Lavergne, 279 A.D.2d 339, 719 N.Y.S.2d 77 (1st Dep’t 2001).