COURT OF APPEALS OF VIRGINIA
Present: Judges Coleman, Willis and Overton
Argued at Alexandria, Virginia
FUND FOR PRIVATE ASSISTANCE IN INTERNATIONAL DEVELOPMENT
and
DAVID KLINE
v. Record No. 2243-95-4 MEMORANDUM OPINION * BY
JUDGE JERE M. H. WILLIS, JR.
BERNARD NASH, ET AL. APRIL 9, 1996
FROM THE CIRCUIT COURT OF FAIRFAX COUNTY
Rosemarie Annunziata, Judge
R. Frances O'Brien (Flott, Rosner & O'Brien,
on briefs), for appellants.
Edward G. Modell for appellees.
The Fund for Private Assistance in International Development
(PAID) and its President, David Kline, appeal from a final decree
of the trial court finding them in contempt of the trial court's
and commissioner's discovery orders and awarding Bernard Nash and
other creditors (Nash) $22,000 in damages, assessed jointly and
severally against PAID and Kline. PAID and Kline contend that
the trial court erred (1) in finding them in contempt, (2) in
awarding $22,000 in attorney's fees, and (3) in holding PAID and
Kline jointly and severally liable for the contempt sanction. We
affirm.
PAID is a non-profit charity formed under the laws of
Washington, D.C. Its purpose is to provide financial assistance
*
Pursuant to Code § 17-116.010 this opinion is not
designated for publication.
to organizations in underdeveloped countries. Kline is its
President and CEO. PAID leased office space in Washington, D.C.
from Nash.
In March 1994, Nash obtained judgment in the Superior Court
of the District of Columbia against PAID and Kline in the amount
of $136,000. Because PAID had moved its office to Vienna,
Virginia, Nash docketed the judgment in Fairfax County. Nash
garnished Account No. 100-13-911 at Patriot National Bank
(Patriot account). PAID contended that this account was exempt
from garnishment because it did not belong to PAID, but to Bridge
International (Bridge).
Bridge is a Virginia non-profit foundation. Its purpose is
to purchase pharmaceuticals and to sell or donate them in
underdeveloped countries. Bridge sublet office space from PAID.
In January 1993, Bridge's founder resigned. In August, 1993,
Kline was appointed Bridge's acting executive officer for the
sole purpose of maintaining the viability of Bridge. He became a
signatory on the Patriot account from January through July 1994.
Bridge was dissolved in December, 1994.
On December 8, 1994, the trial court heard the motion by
PAID and Bridge to dismiss the garnishment of the Patriot
account. The court found the account to be subject to
garnishment, denied the exemption, and authorized Nash to serve
PAID and Kline with debtor's interrogatories inquiring as to
funds transferred into and out of the Patriot account. On
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January 31, 1995, Nash, PAID, and Kline appeared before a
commissioner for the debtor's interrogatories. PAID produced no
documents at that time. It argued that the December 8 order did
not require it to reveal sources of funds passing into the
Patriot account or the destinations of funds leaving the account,
because the donors of those funds had contracts with PAID
containing confidentiality clauses.
On February 3, 1995, the trial court ordered the names of
the donors to be disclosed under an order of confidentiality and
ordered Kline to produce all documents showing the purpose of the
transfers from Bridge to PAID. This was memorialized by an order
entered February 20, 1995. On February 15, PAID produced the
Patriot account bank records but not Bridge's corporate records
relating to the transfers from Bridge to PAID. Before the
commissioner, Kline composed a list, known as the "A-O list," of
all the documents the commissioner ordered PAID to produce.
On March 2, 1995, Nash wrote PAID requesting documents in
addition to those on the "A-O list." PAID objected to this
further document production. On March 13, 1995, Nash requested
the commissioner to find PAID and Kline in contempt. In the
commissioner's report of April 7, he recommended that the trial
court find PAID and Kline in contempt for "failure to produce
those documents listed on the attached list lettered A-O,"
specifically, "those records relating to Patriot Acct. No.
100-13-911, which have been repeatedly ordered including those
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records held by Bridge International."
On April 27, 1995, the trial court conducted a hearing on a
contempt rule against PAID and Kline. Immediately prior to the
hearing, PAID produced further documents which were responsive to
the "A-O list" and the March 2 letter. The trial court found
that PAID and Kline "willfully and improperly failed to fully
respond to debtor's interrogatories and . . . produce documents
required to be produced by the Court's orders, and by the
Commissioner's orders." The court held PAID and Kline in
contempt and assessed $22,000 in damages against them, jointly
and severally. This was the amount that the trial court found to
represent the reasonable value of attorney's fees incurred by
Nash in requiring PAID and Kline to comply with the trial court's
orders.
PAID and Kline contend that the trial court erred in finding
them in contempt. Contending that there was no valid decree and
no willful violation upon which a finding of contempt could be
based, they argue that the December 8, 1994 order was merely
directive and provided no basis for contempt. See Winn v. Winn,
218 Va. 8, 10, 235 S.E.2d 307, 309 (1977). They further argue
that the February 20, 1995 order is invalid on its face because
it requires them to act beyond their power and to produce records
of a non-party corporation. However, the trial court rejected
this argument. Its order was not appealed. The order was a
valid exercise of the trial court's jurisdiction. Disobedience
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is not an acceptable substitute for appeal.
"A trial court 'has the authority to hold [an] offending
party in contempt for acting in bad faith or for willful
disobedience of its order.'" Alexander v. Alexander, 12 Va. App.
691, 696, 406 S.E.2d 666, 669 (1991) (quoting Carswell v.
Masterson, 224 Va. 329, 332, 295 S.E.2d 899, 901 (1982)). The
record supports the trial court's exercise of discretion in
finding PAID and Kline, as President of PAID, in contempt of
court. We find no abuse of the trial court's discretion in its
award of attorneys' fees. "[I]t is within the discretion of the
trial court to include, as an element of damages assessed against
the defendant found guilty of civil contempt, the attorneys' fees
incurred in the investigation and prosecution of the contempt
proceedings." Arvin, Inc. v. Sony Corp. of America, 215 Va. 704,
706, 213 S.E.2d 753, 755 (1975) (citation omitted).
Citing Arvin, PAID and Kline contend that the trial court
erred in holding them jointly and severally liable for the
contempt sanction. Arvin, however, did not address this point.
In Arvin, Arvin, Inc., an authorized dealer of Sony products,
consented to a final decree enjoining it from offering Sony
trademark goods at less than the prices stipulated in fair trade
contracts. Following entry of the decree, Arvin, Inc. and its
president violated the decree 99 times. The court found Arvin,
Inc. "intentionally, willfully, and flagrantly violated the
court's injunction." The court held Arvin, Inc. in contempt and
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imposed a sanction of attorneys' fees. The court did not,
however, impose a sanction against Arvin, Inc.'s president even
though it found he had personally violated the decree. The
court's authority to impose such a sanction was not an issue in
the case.
The record supports the trial court's determination to hold
Kline in contempt. The court's disclosure order was directed to
Kline personally. Kline acted personally in failing to comply
with that order. His conduct was not a mere exercise of his
responsibility as president of PAID. Rather, it represented a
personal effort on his part to frustrate the relief granted Nash
by the trial court.
The judgment of the trial court is affirmed.
Affirmed.
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