Federal Magistrate Certifies Facts Showing Opposing Partys Conduct Constitutes Civil Contempt. District Judge to Hold Show Cause Hearing.
January 15, 2016
LORDA clients Peter Denton and his company Harvest Investors seek to collect on a multi-million dollar Swiss Arbitration award that has been confirmed into a U.S. judgment. The debtor is Swiss citizen Rudolf Suter, currently a Dallas-based optical company executive, who has resorted to obstruction and bankruptcy to avoid paying the judgment against him. In his bankruptcy, Suter was found in contempt of that court for discovery abuse. After being threatened with incarceration by Bankruptcy Judge Stacey Jernigan, Suter paid approximately $30,000 in fees and penalties and produced documents sought by the Trustee.
When Suter was forced to waive his sought-after bankruptcy discharge, the automatic bankruptcy stay was lifted allowing the recovery effort to again proceed in the District Court. Even so, Suter’s bankruptcy continued with a successful fraudulent transfer action against one of his mistresses to obtain title on a $450,000 townhouse purchased for her by Suter (although financed by Suter’s wife). While Suter makes a significant salary with a lavish expense account; he is in violation of three prior court orders requiring him to answer interrogatories and pay attorneys fees. Suter’s defense is that his answers are adequate and he lacks the means to pay the fees awarded against him.
Peter Denton and Harvest Investors filed two Motions for Contempt against Suter. One week after Suter failed to appear at the second contempt motion hearing (he presented a doctor’s note claiming that he had laryngitis), Dallas federal magistrate David Horan issued a 42 page Findings, Conclusions and Recommendation. Magistrate Horan found “that there is clear and convincing evidence that … Suter has … failed to comply with definite and specific court orders. … It is therefore appropriate to employ coercive sanctions under the judicial contempt power.” Accordingly, Magistrate Horan recommended that Suter “be cited to appear before United States District Judge David C. Godbey … and show cause why he should not be held in civil contempt for violating [three court orders] and be subject to appropriate judicial sanctions to coerce compliance with the Court’s orders and/or compensate … Denton and Harvest Investors for any losses sustained as a result of … Suter’s noncompliance.”