Jack Nelsopn Jones Professional Associates

January 16-22, 2017

Almeida v. Metal Studs, Inc., 2016 Ark. App. 602 (December 14, 2016)

This appeal comes from the Benton County Circuit Court, honorable Thomas Smith presiding. This case concerns whether monetary sanctions are a final, appealable contempt order.

In July 2013, Drywall Crews, Inc. (DCI), filed a complaint for injunctive and declaratory relief against Kristopher Almeida. The complaint alleged that Almeida, a former employee of DCI, had violated the parties’ confidentiality and noncompetition agreement. On 15 August 2013, the circuit court entered a preliminary injunction that ordered Almeida to return certain equipment to DCI and enjoined him from working for one of DCI’s competitors. The injunction order took effect immediately and remained in effect pending the earlier of either a superseding order or 15 July 2015. Almeida filed an answer on 29 August 2013; however, no further action was taken in the case for over a year.

In October 2014, DCI initiated discovery by filing a request for admissions. After several delays, Almeida filed a response to the request for admissions in January 2015. On 26 January 2015, DCI filed a motion for contempt, alleging that Almeida had “willfully and maliciously” violated the preliminary injunction. In February 2015, DCI and Almeida both filed motions to compel discovery. The court entered an order in June 2015 requiring both parties to provide discovery and to complete depositions within thirty days. The court set a hearing for July 16 to address any remaining discovery issues and to proceed on Plaintiff’s Motion for Contempt.

At the July 16 hearing, certain discovery issues were still not completed, including Almeida’s deposition of DCI’s witness, Adrian Avalos. The circuit court allowed Almeida to complete his deposition, but stated that it wanted all discovery done by August 31 and that the court would take up and finalize the contempt issue on August 25 at 1:15 pm. The court also found that the preliminary injunction would be extended to August 31.

On 27 August 2015, Almeida filed a “motion for continuance of docket call” requesting that the August 28 hearing be rescheduled. In the motion, Almeida’s counsel claimed that he had learned about the scheduled hearing on August 26 and that the “new hearing date has caught Defendant and counsel by surprise.” Counsel also argued that “no Order has ever been entered by the Court from the July 16 docket call regarding its rulings on discovery or the extension of the Preliminary Injunction.” DCI opposed this motion and argued that the circuit court continued the contempt hearing until August 28 in open court, that this should not be a surprise to counsel or his client, and that the contempt hearing had already been continued several times to allow Almeida time to conduct discovery.

When the circuit court reconvened the hearing on August 28, Almeida was not in attendance. When asked why his client was not present, counsel said, “Because I didn’t know we had a contempt hearing today.” Counsel argued that there was “no docket entry . . . no order of anything,” but the court stated, “When somebody is sitting right here in this courtroom, and they’re given an order of the Court to come here at one o’clock on this date, with their client sitting right there, they need to have their butt here.” Counsel later acknowledged that he thought the hearing date was August 31 and that he was “terribly sorry.” But he also asserted that Arkansas Rule of Civil Procedure 58 requires a written order to be entered to be effective.

The circuit court imposed a sanction of “$3,500 in fees, for him not showing up” and also awarded travel and hotel expenses for Avalos, who had traveled from Texas for the hearing. The circuit court explained that Almeida was sanctioned because he was not in court when he should have been there whether he got a written order or not, “the order of the [circuit] court that he heard was to be here. It’s in the transcript.”

On 9 September 2015, the court entered a written order for monetary sanctions against Almeida for failing to be present in court on 28 August 2015. The sanctions consisted of $3,500.00 for attorney’s fees and $1,198.00 representing the air fare and hotel accommodations of Avalos, for a total of $4,698.00. The court also continued the contempt hearing again to 25 September 2015. Almeida moved the court to reconsider the sanctions, but the court did not rule on the motion. Almeida appealed.

On appeal, the Court began by stating that, despite no party raised the issue, whether an order is final and appealable is a jurisdictional question that the Court will raise on our own. Almeida stated that this was “an appeal from an order of the circuit court imposing monetary sanctions for civil contempt” and that Court jurisdiction was proper pursuant to Rule 2(a)(13) of the Arkansas Rules of Appellate Procedure–Civil. Rule 2(a)(13) provides that an appeal may be taken from “[a] civil or criminal contempt order, which imposes a sanction and constitutes the final disposition of the contempt matter.” As a threshold issue, the Court had to determine whether the action was a civil or criminal contempt order from which an appeal could be taken. Neither the circuit court’s oral pronouncement nor the written order made a finding that Almeida was “in contempt.” The Court understood that, from Almeida’s perspective, the court’s sanction and cost award for Almeida’s failing to appear at the continued hearing could look like a contempt finding. But the Court hesitated to call it a contempt order.

In the recent case of Hankook Tire Co. v. Philpot, the circuit court issued an

order awarding attorney’s fees against Hankook for obstructing discovery, and Hankook appealed this order citing the contempt-with-sanctions provision of Ark. R. App. P.–Civ. 2(a)(13). In that

case, the Court dismissed the appeal, however, and explained, “[T]he trial

court here did not hold Hankook ‘in

contempt,’ although it could have so

determined as an appropriate sanction under Rule 37(b)(2)(D). Rather, the trial court here entered an order for attorney fees for discovery obstruction. This is not a final, appealable order.” Granting that this case was a unique one in the current case law, the Court believed that Hankook was analogous to this case because there was no actual finding of contempt but there was a sanction by the court. Consequently, the Court held that the order imposing sanctions on Almeida was not a final, appealable order and therefore dismissed the appeal without prejudice. Dismissed.