Goya Foods, Inc. v. Unanue-Casal

United States Court of Appeals
For the First Circuit

No. 01-1214

GOYA FOODS, INC.,

Plaintiff, Appellee,

v.

ULPIANO UNANUE-CASAL,
a/k/a CHARLES UNANUE,

Defendant, Appellant.
__________

LILIANE UNANUE and KALIF TRADING, INC.,

Defendants.
____________________

No. 01-1585

GOYA FOODS, INC.,

Plaintiff, Appellee,

v.

LILIANE UNANUE,

Defendant, Appellant.
__________

ULPIANO UNANUE-CASAL, a/k/a CHARLES UNANUE,
and KALIF TRADING, INC.,

Defendants.

APPEALS FROM THE UNITED STATES DISTRICT COURT
 FOR THE DISTRICT OF PUERTO RICO

[Hon. José Antonio Fusté, U.S. District Judge]

Before

Boudin, Chief Judge,

Kravitch,* Senior Circuit Judge,

and Lynch, Circuit Judge.

Jan Alan Brody with whom Carella, Byrne, Bain, Gilfillan,
Cecchi, Stewart & Olstein was on brief for defendant Liliane
Unanue.
Charles Unanue on brief pro se.
Ira Brad Matetsky, Legal Department, Goya Foods, Inc., with
whom Arturo J. García-Solá and McConnell Valdés were on brief
for plaintiff Goya Foods, Inc.

December 27, 2001

*Of the Eleventh Circuit, sitting by designation.
 BOUDIN, Chief Judge. This appeal grows out of efforts

by Goya Foods, Inc. ("Goya") to enforce a state court judgment

against Charles Unanue and to reach certain of his assets held

in the name of other parties including his wife Liliane. Prior

history is recounted in Goya Foods, Inc. v. Unanue, 233 F.3d 38

(1st Cir. 2000)("Goya I"), cert. denied, 121 S.Ct. 1964 (2001).

What follows is a brief history of the background and a summary

of events since Goya I.

In 1987, Goya sued Charles in New Jersey state court

for breach of a settlement agreement governing an earlier

dispute. While the state court suit was ongoing, Charles filed

for bankruptcy in 1990 in Puerto Rico and the bankruptcy estate

became a party to the New Jersey litigation. In February 1995,

the New Jersey court entered a judgment against both Charles and

his estate for $6.9 million. In re Unanue, No. M-128817, slip

op. (N.J. Super.Ct. Ch. Div. Feb. 23, 1995). On September 12,

1995, the bankruptcy court dismissed Charles' bankruptcy case

without granting him a discharge. In re Unanue-Casal, No.

90-04490, slip op. at 5 (Bankr. D.P.R. Sept. 12, 1995).

In November 1995, after the New Jersey judgment was

entered, Goya filed an action in the federal district court in

Puerto Rico against Charles, his wife, Liliane, and Kalif

Trading (a Panamanian corporation organized by Charles), seeking

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to enforce the New Jersey judgment against certain assets

nominally held by Liliane or Kalif. Included among these assets

were cooperative shares in Apartment 10A, at 625 Park Avenue in

New York City. Although the shares were titled in Liliane's

name, Goya said Charles had paid the purchase price and

maintenance fees on the apartment and was the true beneficial

owner.

At the outset, Goya moved for provisional remedies to

ensure its ability to collect any judgment it might obtain.

Goya sought a prohibition on the alienation of certain

properties held by Charles, Liliane and Kalif, including the

shares in Apartment 10A. The district court granted the request

on November 17, 1995. The order reads, in part:

ORDERED that defendants, their agents, employees,
and all persons holding property for them or acting in
concert with them, are prohibited from alienating or
in any way assigning, transferring, selling or
otherwise disposing or encumbering any of the real
properties, including cooperative shares, listed below

. . . .

2. Apartment 10A at Park Avenue, New York, New York,
cooperative shares pertaining to which are held in the
name of Liliane Unanue.

The court issued a second order, similar to the first,

specifically prohibiting alienation of the shares to Apartment

10A. That order reads:

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 ORDERED that defendant Liliane Unanue, her agents,
employees, and all persons holding property for her or
acting in concert with her, are prohibited from
alienating or in any way assigning, transferring,
selling or otherwise disposing or encumbering any of
the cooperative shares pertaining to Apartment 10A at
Park Avenue, New York, New York, or her ownership
interest in the premises represented by such shares.

After denying the Unanues' motions to dismiss the suit

for lack of personal jurisdiction, the district court held a 10

day bench trial in July 1997 and issued its opinion on October

31, 1997. The court found that Liliane and Kalif Trading were

holding properties for Charles and that Goya could execute

against those properties. Goya Foods, Inc. v. Unanue-Casal, 982

F. Supp. 103, 112 (D.P.R. 1997). It discussed, at some length,

Apartment 10A, and ruled that Goya has a right "to execute

judgment over . . . any residence registered to [Liliane's] name

. . . ." Id. However, the court sua sponte stayed enforcement

of the judgment pending Charles’ appeal to this court and his

appeal of the underlying state court judgment (even though the

Unanues were not required to post a bond). Id.

The New Jersey appellate court subsequently affirmed

the state judgment and the state supreme court denied further

review. In re Unanue, 710 A.2d 1036, 1041 (App. Div.), cert.

denied, 724 A.2d 801 (1998). In an opinion issued November 28,

2000, this court affirmed the Puerto Rico judgment, making clear

that as to Liliane, the judgment reached only those properties

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at issue in the case. See Goya Foods, Inc., 233 F.3d at 45-46.

The Supreme Court recently denied certiorari. 121 S. Ct. 1964

(2001).

However, in October 2000, while the appeal of the

Puerto Rico district court judgment was still pending before us,

Goya discovered that the Unanues had secretly sold Apartment 10A

in June 1998 for $4.6 million and had directed that $4.2 million

of the sale price--apparently the balance after commissions--be

wired to a Swiss bank account in Liliane’s name. Goya claims

both Charles and Liliane played integral roles in the sale.

When it learned of the sale, Goya filed an ex parte

motion, on October 16, 2000, asking the district court for an

order directing Charles and Liliane to appear in person and show

cause why they should not be held in contempt of court. The

court issued the show cause order on October 20, 2000. It

reads:

ORDERED that defendant Charles Unanue a/k/a Ulpiano
Unanue Casal and defendant Liliane Unanue each shall
APPEAR PERSONALLY BEFORE THIS COURT, together with
counsel if they be so advised, on the 31st day of
October, 2000, at 9:30 a.m. [in the United States
Courthouse in Hato Rey, Puerto Rico] and then and
there SHOW CAUSE why they should not be held in
CONTEMPT OF COURT for their knowing and willful
violation of the [November 17, 1995] Orders of this
Court, and why the Court should not grant appropriate
relief therefor . . .

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 The court emphasized that Charles and Liliane were to

"APPEAR PERSONALLY" in court for the hearing, "such that an

appropriate warrant for their arrest and detention shall issue

upon their failure to appear as directed." The court also

vacated the stay of execution it had placed on its judgment,

effective October 27, 2000, unless Charles and Liliane deposited

$4.6 million with the court or posted a bond. Further, the

court granted Goya's request to conduct discovery regarding the

details of the sale of Apartment 10A.

The Unanues were notified of the order on October 24,

2000, at their residence in New York City. Liliane's New Jersey

attorney, Jan Brody, was also served with a copy. The Unanues,

however, failed to appear at the scheduled hearing; instead,

after receiving the show cause order, they apparently left New

York for Paris. To this date, they remain fugitives; they have

not appeared before the court, nor have they made any effort to

pay the underlying judgment.

Two attorneys, whom the Unanues had contacted the day

before the hearing, did appear at the hearing. They informed

the court they had not yet decided whether to represent the

couple and requested additional time to familiarize themselves

with the case to make their decision. The court responded:

The problem that I have here is that there was an
order entered by this court regarding disposition of

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 assets, and the order was violated. We're not talking
about the sale of a car; we're talking about the sale
of an apartment for over $4 million. It's a major
thing, and the papers on record show that these monies
were transferred to some account in Europe . . . And
under these circumstances, I would have expected the
defendants . . . with or without counsel, to appear
here today.

This record is full of instances in which these
defendants, out of disrespect for orderly proceedings
before a court of justice or because of the fact that
they were proceeding pro se in many various instances
in which they appeared, the truth of the matter is
that they have not complied with a number of
dispositions. And under these circumstances, the
only thing that I find prudent to do is one of two
things. Either forget about it and not enforce the
order and just assume that they are incapable of
complying and forget about it, simply, or just have
them arrested. And I think there are only two
alternatives, and the alternative of choice is the
order. We're going to enforce orders of this Court
and not allow these things to happen in this case, or
any other case.

The only other alternative is to order their arrest.
So what I will do is this. I will ask the court to
issue an arrest warrant against these two individuals.
. . .

There will be no bail, no bail posted, and upon their
arrest, these individuals should be transferred to
this district, and then I will set a hearing. This
will give them the opportunity now of dealing with
counsel and hiring local counsel, because the hearing
won't be held today. I'm just taking a preventive
measure, basically to avoid further flouting of the
orders of this Court.

Thereupon, bench warrants were issued for the arrest of the

Unanues.

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 The district court also granted Goya's motions, filed

the day of the hearing, to execute judgment against another

apartment located in San Juan, and to appoint a special master

to conduct the sale of the property. In response, Charles and

Liliane filed separate motions seeking to vacate all orders

related to the contempt proceedings and execution of the

judgment. Charles filed his motion, by mail, from France, on

November 25, 2000. The court denied the motion on December 5,

2000, and on December 19, 2000, Charles filed his notice of

appeal from that denial.

Liliane filed a similar motion to vacate, again, by

mail from Europe, on December 18, 2000, captioned "Emergency

Motion To Vacate Order of this Court for Ap[p]ointment of

Special Master and To Vacate Warrant for Arrest of Liliane

Unanue." The motion asked the court to rescind all orders

requested by Goya subsequent to October 15, 2000. The court

denied the motion on February 21, 2001, and, on March 19, 2000,

Liliane filed a notice of appeal from the denial.1

1 On February 22, 2001, the district court ordered them to
hand over the proceeds from the sale of Apartment 10A to Goya or
to the court and granted the special master access to the Puerto
Rico apartment. Goya also sought contempt sanctions against the
buyer of Apartment 10A, the management company, and the
apartment cooperative which approved the sale, asserting that
these parties were aware that the sale violated the district
court's orders prohibiting alienation. After holding a show
cause hearing, the district court held the three parties in

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 In their appeals, which have been consolidated, Charles

and Liliane make virtually identical arguments. They claim the

Puerto Rico federal court lacked subject matter jurisdiction

over all proceedings in this case. They also claim the court

lacked in personam jurisdiction over them in the original

proceeding. As to the contempt hearing, they claim they were

given insufficient notice. Lastly, they say that the district

judge, who presided over all the matters in this long-running

case, prejudged the contempt charge and should have recused

himself.

At the outset Goya raises two threshold issues, asking

this court to dismiss the appeals for want of a final appealable

judgment or under the fugitive disentitlement doctrine. The

question which, if any, of the district court's rulings is

appealable now presents interesting questions. The Unanues

purport to appeal from four or five different "orders" of the

district court. But we need not determine which of these

orders, if any, is final because we dismiss the Unanues' appeals

under the fugitive disentitlement doctrine.

contempt and ordered them to pay Goya $4.6 million, plus
interest and attorneys fees. Goya Foods, Inc. v. Unanue-Casal,
No. 386, 2001 WL 505305 (D.P.R. May 4, 2001). An appeal from
that decision has been filed.

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 There is substantial precedent for dismissing an appeal

by one who has fled, Walsh v. Walsh, 221 F.3d 204, 214 (1st Cir.

2000) (collecting cases), cert. denied, 531 U.S. 1159 (2001),

even where the appeal is taken from a civil judgment.2 But the

doctrine is also discretionary rather than automatic and to be

applied with caution. Notably, in Degen, the Supreme Court

found that a civil forfeiture suit should not be dismissed

merely because the defendant was in flight from a different

albeit connected criminal prosecution, and it focused attention

on practical considerations particular to the case rather than

abstract concerns about court dignity or future deterrence. 517

U.S. at 825-29.

In our own case, several considerations warrant

dismissal of the appeals. First, the underlying conduct with

which we are concerned is extremely serious. The charge is

that, in the teeth of explicit orders prohibiting Charles and

Liliane from transferring the shares, both of them connived at

violating the orders, enriched themselves by $4.2 million, and

then fled the jurisdiction. When instructed to return and

defend their actions, they refused to do so. This is not, in

2E.g., United States v. Barnette, 129 F.3d 1179, 1186 (11th
Cir. 1997); Empire Blue Cross & Blue Shield v. Finkelstein, 111
F.3d 278, 282 (2d Cir. 1997); see also Degen v. United States,
517 U.S. 820, 823 (1996); Walsh, 221 F.3d at 215.

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short, some garden variety discovery dispute but--so far as

appears--blatant defiance of explicit court orders.

Second, the appellants' flight is not from some other

proceeding, as in Degen, raising the specter that dismissal of

the civil appeal is being used to coerce appearance in the

criminal case. Here, the flight grows directly out of Goya's

effort to enforce its judgment in the civil proceeding which

consumed years of litigation; and the appeal is from actions and

orders of the district court designed to enforce that very

judgment. Indeed, the flight prevents Goya from discovery that

might be used to unearth the proceeds of the sale or otherwise

enforce its judgment. Empire Blue Cross & Blue Shield, 111 F.3d

at 282.

Third, on the most practical level, the appeals are

themselves little more than devices to frustrate and delay the

enforcement of the original judgment. In general, appellants'

main arguments are without merit; indeed, several were made

unavailingly in the original action and are now clearly barred

by the law of the case. Cohen v. Brown Univ., 101 F.3d 155, 167

(1st Cir. 1996), cert. denied, 520 U.S. 1186 (1997). The only

effect of the appeals is to raise the cost for Goya of

implementing the judgement, to consume the district court's

time, and to provide a vehicle for seeking stays which would

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further delay Goya's recovery if this court were naive enough to

grant them. See Barnette, 129 F.3d at 1185-86.

Lastly, flight in this instance is unfortunately not

some novel and eccentric event but is of a piece with the

conduct of the appellants over a lengthy period. Charles'

concealment of assets has a long and distressing history, and

Liliane has abetted him, inter alia, by making factual claims as

to the origin of the assets that were flatly rejected by the

district court as false or unsupported. Goya Foods, Inc., 982

F. Supp. at 103. The violation of explicit orders of the court

and the flight to avoid the show cause hearing are only the

latest in this series of evasions.

The appellants argue against the doctrine but

unpersuasively. They say, for example, that Apartment 10A has

not left the jurisdiction and that Goya has pursued other

parties (e.g., the buyer of the apartment) for identical

amounts. But, of course, the shares in Liliane's hands were the

least costly means to realize on the apartment's value, see

Barnette, 129 F.3d at 1183, and others who benefitted or

assisted may have good-faith defenses. And the very cost to

Goya of pursuing others, when the shares were subject to an

order in favor of Goya, is itself harm. See Walsh, 221 F.3d at

215.

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 Goya has filed a motion for an award of costs against

Liliane Unanue and her counsel (Jan Allen Brody, Esq. and the

Carella Byrne firm) in the amount of no less than $7,500. See

28 U.S.C. §§ 1912, 1927; Fed. R. App. P. 38 (if a court

determines that an appeal is frivolous, it may award just

damages and single or double costs to the appellee). Goya

asserts that its actual expenses have been substantially in

excess of this amount but seeks at least token compensation for

having to file a lengthy brief addressed to arguments, a number

of which are clearly frivolous.

Two such arguments serve as examples. The first is the

claim that the district court lacked jurisdiction ab initio

because the underlying New Jersey state court judgment was not

properly validated in Puerto Rico. In particular, the Unanues

say the court failed to hold an exequator proceeding, as

required under Puerto Rico law. Ex parte Marquez Estrella, 128

D.P.R. 243 (P.R. 1991)

This claim is identical to one made and flatly rejected

in Goya I. Our decision in that case states, in no uncertain

terms, that the exequator objection does not go to the court's

subject matter jurisdiction. Goya I, 233 F.3d at 47. Further,

we held that the Unanues had forfeited the claim because they

had not made it in a timely fashion before the district court.

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Id. at 46. There is no excuse for resurrecting the argument now

in an appeal from a subsequent enforcement action.

The Unanues also claim the district judge, who presided

over the proceedings from the outset, should have recused

himself because he prejudged the contempt charges against them.

28 U.S.C. § 455(a) (1994). As a basis for the claim, they cite

the judge's comments at the show cause hearing that "there was

an order entered by this court regarding this disposition of

assets, and that order was violated." The district judge

proceeded to hold that the "record is full of instances in which

these defendants, out of disregard for orderly proceedings

before a court of justice . . . has not complied with a number

of dispositons." The Unanues say these comments, made at the

conclusion of the show cause hearing, demonstrate pre-judgment

of the contempt charge.

It is well-settled that a judge who expresses

preliminary views inside the court, based upon knowledge

acquired in court proceedings, is not recusable. Liteky v.

United States, 510 U.S. 540, 550-51 (1994); In re Boston

Children's First, 244 F.3d 164, 169 n.9 (1st Cir. 2001); United

States v. Gordon, 634 F.2d 639, 641 (1st Cir. 1980). This is so

plainly settled that the request for recusal is frivolous on the

facts of this case. What is more, the request was clearly

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forfeited; it was never made before the district court and

appears, for the first time, in Liliane's brief filed nearly

eight months after the show cause hearing was held. United

States v. DiPina, 230 F.3d 477, 486 (1st Cir. 2000).

Under these circumstances, we conclude that an award

of $7,500 in costs against Jan Alan Brody and the Carella Byrne

firm is amply justified in favor of Goya. Normally, we would

not assess even such modest costs based upon the

characterization of an individual argument or two, see Kowalski

v. Gagne, 914 F.2d 299, 309 (1st Cir. 1990); but the two

examples given are extreme and taken with other attempts to

reargue matters previously decided or forfeited or otherwise

hopeless appear to us to warrant the modest award in question in

this instance. Finch v. Hughes Aircraft Co., 926 F.2d 1574,

1580 (Fed. Cir. 1991); Hill v. Norfolk and Western Ry. Co., 814

F.2d 1192, 1200 (7th Cir. 1987).

Accordingly, it is ordered that the appeals be

dismissed based on the fugitive disentitlement doctrine and that

Jan Alan Brody and the Carella Byrne firm pay to Goya $7,500

additional costs. The award of additional costs will run only

against counsel, there being no indication that Liliane Unanue

was either a lawyer or a party to the selection of arguments.

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 Accordingly, the appeal is dismissed and the motion for

costs is granted.

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