An order finding civil contempt is not a final order giving rise to a right to appeal, even if the contempt order imposed a $15,000 sanction, according to a district judge in California.
The Jan. 26 opinion by District Judge Percy Anderson of Los Angeles shows vividly why an appellant should seek leave to take an interlocutory appeal whenever the order below is arguably interlocutory.
The case involved a couple in chapter 7 where the bankruptcy judge had directed them to turn over the nonexempt portions of the cash-surrender values of insurance policies. When they failed to comply with the order, the bankruptcy judge made a finding of civil contempt that, among other things, directed them to pay more than $15,000 in compensation for the trustee’s legal fees.
Judge Anderson dismissed the appeal for lack of jurisdiction under 28 U.S.C. § 158(a) because the civil contempt order was interlocutory.
He cited a 2004 California case, Oliner v. Kontrabecki, which in turn relied in part on the Supreme Court’s 1936 opinion in Fox v. Capital Co. The high court said that a civil contempt order in a bankruptcy case is not final except in connection with an appeal from a final judgment.
Judge Anderson had given the couple the choice of submitting a motion for leave to take an interlocutory appeal or filing a brief contending that the civil contempt order was final. The couple chose to argue for finality and lost.
The opinion seems to mean that the couple could not appeal until after the final decree closing the case. They could not appeal the contempt sanctions along with an appeal from the turnover order because the time for a turnover appeal had already run out.
The interlocutory nature of civil contempt orders explains why aggrieved parties usually file petitions for mandamus. However, mandamus entails a higher standard like abuse of discretion, which can be more difficult to show.
The couple evidently made a mistake by not asking for leave to appeal. Or, perhaps they would have succeeded had they relied on the more flexible notion of finality in bankruptcy cases, since the underlying turnover order was already final.