Donald V Yeager

UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF OHIO
WESTERN DIVISION
In Re
DONALD V. YEAGER
Debtor
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Case No. 05-24818
Chapter 7
Judge Hopkins
MEMORANDUM ON MOTION FOR SANCTIONS
Presently before the Court is a Motion For Sanctions For Contempt Of Debtor, Donald V.
Yeager, For Failure To Comply With Order Of The Court ("Sanctions Motion") (Doc. 35) filed by
Tuffy Associates Corp. ("TAC"). By its Sanctions Motion, TAC seeks a contempt order for the
Debtor's alleged failure to abide by a Court order directing the Debtor to appear for a Fed. R. Bankr.
P. 2004 examination and to produce certain documents associated with the Debtor's bankruptcy. A
hearing on the Sanctions Motion was held on July 24, 2006.
This document has been electronically entered in the records of the United
States Bankruptcy Court for the Southern District of Ohio.
IT IS SO ORDERED.
Dated: October 16, 2006
____________________________________________________________
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FACTS
On December 28, 2005, the Court entered an order ("2004 Order") (Doc. 16) granting TAC's
motion for a Rule 2004 examination of the Debtor ("2004 Motion") (Doc. 13). The 2004 Order
directed the Debtor to appear for a January 16, 2006 examination and produce certain documents
identified in an exhibit attached to the 2004 Order. The 2004 Order further provided that "[s]uch
examination shall continue from day-to-day until completed."
The Debtor appeared at the January 16, 2006 examination, but did not produce
documentation regarding: (1) the Debtor's 401(k) plan with General Motors; (2) bank records; (3)
insurance policies; and (4) 2003 tax returns for a corporate entity related to the Debtor. 	The
examination was continued to February 17, 2006. Again, the Debtor appeared without producing
all of the required documents. The examination was continued to March 20, 2006, at which time
the Debtor failed to appear entirely. The examination was again continued to March, 27, 2006. The
Debtor appeared at the fourth exam, but has yet to provide TAC with certain of the previously
requested documents. The record from the July 24, 2006 hearing reflects that TAC still has not
received documentation regarding: (1) the Debtor's 401(k) plan with General Motors; and (2)
records of cash receipts and cash disbursements.
LAW
Bankruptcy courts possess the power to enter civil contempt orders. See Elder-Beerman
Stores Corp. v. Thomasville Furniture Indus. Inc. (In Elder-Beerman Stores Corp.), 197 B.R. 629,
632 (Bankr. S.D. Ohio 1996). This includes the power to hold a debtor in civil contempt for failure
to comply with an order governing a Rule 2004 examination. See In re McCaulley, 218 B.R. 866
(Bankr. N.D. Ohio 1998).
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ANALYSIS
TAC argues that the Debtor is in contempt because: (1) he has not provided all of the
required documentation; and (2) he failed to appear at the March 20, 2006 examination. These
issues will be addressed in order.
I. 	Production of Documentation
At the July 24, 2006 hearing, the Debtor did not dispute that he failed to produce all of the
required documentation at the January 16, 2006 examination. 	Additionally, the Debtor did not
dispute that TAC has yet to receive the 401(k) documentation or records of cash receipts. Instead,
the Debtor argued that the documentation was not produced on January 16, 2006, because either:
(1) the documentation did not exist; or (2) the Debtor could not locate the documentation.
It goes without saying that one cannot produce a document that does not exist or cannot be
located. 	Nevertheless, that is an issue that should have been raised, in the first instance, in the
response to TAC's 2004 Motion. See 8A Charles Alan Wright et al., Federal Practice and Procedure
§ 2289 (2d ed. 1994) ("The propriety of the discovery sought is not in issue at the time sanctions are
being imposed under Rule 37(b). That question will have been decided when the court ordered the
discovery."); accord Constitution Bank v. Levine, 151 F.R.D. 278, 279 (E.D. Pa. 1993).
In this case, the Debtor did not object to the 2004 Motion. Moreover, almost four months
passed between the filing of the Sanctions Motion and the hearing on the same. During that time,
the Debtor never moved to amend or vacate the 2004 Order nor did the Debtor move for a protective
order, asserting that he could not find any documents contemplated by the 2004 Order, which seems
to belie his present claims to the contrary.
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Case No. 05-24818
1 Even if the continuation was conditional, the record at the March 20, 2006 examination
reflects that TAC exercised its alleged option to continue the examination.
Mr. Slutsky: [T]his 2004 continuation was if necessary, if felt necessary by counsel for
Tuffy's [sic]. No question they felt it necessary. They notified me they wanted
to go forward. I have been trying to reach my client to no avail, so I have no
idea where he is[.]
(See Doc. 47, Ex. D at 2.)
2 On March 30, 2006, counsel for TAC filed an affidavit setting forth TAC's attorney's fees and
costs related to the three continued Rule 2004 examinations and the preparation of the
Sanctions Motion. See Doc. 35 at Ex. D. The Debtor has never contested the propriety of
the affidavit.
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II. 	Failure to Attend March 20, 2006 Examination
At the July 24, 2006 hearing, the Debtor argued that it was not clear that he had to attend the
March 20, 2006 examination. 	According to the Debtor's understanding, the March 20, 2006
examination was to be held only if TAC chose to go forward with the same by notifying the Debtor
and his attorney. 	The record of the February 17, 2006 examination does not reflect such a
conditional agreement. Instead, the record reflects the following:
Mr. Alexsy: We've agreed to resume the rule 2004 exam, Monday, March 20 at
10:30 here in Mr. Slutsky's office.
(Doc. 46, Ex. C at 17.) Neither the Debtor nor his attorney qualified this statement to reflect that
the March 20 th examination was contingent upon further notice from TAC.1
CONCLUSION
Because the Debtor has not provided a valid defense to explain his failure to comply with
the 2004 Order, the Sanctions Motion will be GRANTED. A judgment will be entered awarding
TAC its attorney's fees and costs in the amount of $4,290. 2 However, to the 	extent of TAC's
sanctions Motion seeks dismissal of the Debtor's bankruptcy case that the portion of the Sanctions
Motion is OVERRULED without prejudice.
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Copies to:
Donald V. Yeager
8060 Plantation Drive
West Chester, OH 45069
Steven F. Alexsy, Esq.
salexsy@seyburn.com
U.S. Trustee
ustpregion09.ci.ecf@usdoj.gov
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