Residential Capital, LLC

UNITED STATES BANKRUPTCY COURT
SOUTHERN DISTRICT OF NEW YORK
In re:
RESIDENTIAL CAPITAL, LLC, et al.,
Debtors.
FOR PUBLICATION
Chapter 11
Case No. 12-12020 (MG)
MEMORANDUM OPINION SUPPORTING THE ENTRY OF ORDER GRANTING
THE UNITED STATES TRUSTEE’S MOTION FOR CIVIL CONTEMPT
A P P E A R A N C E S:
OFFICE OF THE UNITED STATES TRUSTEE
U.S. Federal Office Building
201 Varick Street, Room 1006
New York, New York 10014
By: 	Andrew D. Velez-Rivera, Esq.
MARTIN GLENN
UNITED STATES BANKRUPTCY JUDGE
Pending before the Court is the United States Trustee’s (the “U.S. Trustee”) Motion for
Entry of Civil Contempt Order Against Chaledeeannka Deborah Ann Williams Goyens-Bell
Eberwein (“Goyens”) (the “Motion,” ECF Doc. # 10391). Accompanying the Motion is a
Memorandum of Law (the “Memo,” ECF Doc. # 10391–1), and the Declaration of Andrew D.
Velez-Rivera (the “Velez-Rivera Decl.,” ECF Doc. # 10391–2). At a hearing on June 29, 2017
(the “Hearing”), the Velez-Rivera Declaration was admitted into evidence. Goyens did not
appear at the Hearing. On July 5, 2017, the Court entered an order (the “Contempt Order,” ECF
Doc. # 10409) granting the Motion. The Court stated at the June 29, 2017 hearing that an
Opinion would follow further explaining the basis for the Contempt Order.
The U.S. Trustee fulfills an important role in bankruptcy proceedings, helping to oversee
the administration of bankruptcy cases. Here, the U.S. Trustee diligently performed this
responsibility in helping to oversee the administration of this case by moving for contempt
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against Goyens, who plainly has no legitimate purpose in filing papers before this Court, and
who has repeatedly flouted the authority of other courts.
I. 	BACKGROUND
A. 	The Motion
The Motion requested that this Court enter an order requiring Goyens to withdraw her
filing seeking “judicial notice” (the “Request for Notice,” ECF Doc. # 10358)1 and to impose a
daily sanction of $100.00 for every day after June 17, 2017 that she failed to do so. (Motion at
1.) As of the Hearing, the Request for Notice had not been withdrawn. The Motion sought entry
of an order holding Goyens in contempt, imposing monetary sanctions to compel compliance
with the Contempt Order, and providing that if Goyens did not withdraw the Request for Notice
after 60 days, the Request for Notice be removed from public view and that further accumulation
of monetary sanctions cease. (Id. at 2.) Objections to the Motion were due June 22, 2017; none
were filed. The U.S. Trustee served Goyens with the Motion on May 17, 2017. (Id. at 3.) The
Court granted the Motion in a form substantially similar to what the U.S. Trustee sought, as
described in the Contempt Order.
B. 	Goyens and Her History Before This Court
On April 17, 2012, Goyens and Robert Daniel Eberwein (“Eberwein”) filed a joint
voluntary petition for chapter 11 relief; the case was pending before my colleague, Judge Sean
H. Lane, as Case No. 12-11580 (SHL) in the U.S. Bankruptcy Court for the Southern District of
New York. (Velez-Rivera Decl. at 1–2.) In connection with that chapter 11 case, on October 4,
2012, the U.S. Trustee filed an adversary complaint (the “Adversary Complaint”) against
Eberwein, Goyens, and others (the “Adversary Case,” Adv. Proc. No. 12-01901 (SHL)). (Velez-
1 	The Request for Notice is 62 pages and appears to have no intelligible principle of organization. It appears
to consist of random court documents and handwritten notes. Particularly egregious, some of the notes appear to
have personal financial information and names of non-parties.
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Rivera Decl. at 2.) The Adversary Complaint included serious allegations of wrongdoing by the
defendants. (Id.)
The Adversary Complaint alleged that Goyens used 45 different names to file for
bankruptcy throughout the nation. (Id. at 1–2) Between 1991 and 2009, Goyens filed 34
bankruptcy cases, six bankruptcy appeals, four adversary proceedings, nine civil cases in federal
district court, and six appeals in the federal courts of appeals. (Id. at 2) Furthermore, between
2010 and 2012, Goyens filed six bankruptcy cases in the Southern District of New York. (Id.)
On June 27, 2012, in a chapter 13 case filed in this District by Eberwein (see Case No.
12-11486 (SHL)), in response to irrelevant and vexatious e-mails received by the court’s staff,
the Court entered an order providing “that [Eberwein] or other party in interest, or anyone
affiliated or associated with any Debtor or other party in interest . . . and any recipient of the
emails sent by [Eberwein] to the Court, is prohibited from sending emails or other forms of
electronic transmission, including facsimile, to any employee of this federal bankruptcy court, to
the United States Trustee (Region 2) or any employee of the United States Trustee, and to any
case or standing trustee.” (Case No. 12-11486 (SHL), ECF Doc. # 21, at 2.) Because the
Debtors had intentionally been submitting large paper filings for no other purpose than to tie
down the court’s resources, on July 24, 2012, the Court entered another order requiring that,
“with respect to any paper filing of more than 20 pages, or filings on the same day totaling more
than 20 pages, that is submitted by any Debtor, Plaintiff or other party . . . in any such cases or
adversary proceedings,” an electronic copy of the filing also must be submitted. (Id., ECF Doc.
# 23, at 2.)
New York was not the only State where Goyens engaged in these shenanigans. Goyens
is a “vexatious litigant” according to a list maintained by the Judicial Council of the State of
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California. (Velez-Rivera Decl. at 4.) According to the Adversary Complaint, in 2002, the
bankruptcy court for the Eastern District of California entered a 180-day bar order against future
filings by Goyens, and the Northern District of California entered a one-year bar order barring
filings by Goyens. (Id. at ¶¶ 8–9.) In 2006, the Northern District of California entered an
additional order barring Goyens from filing papers for three years. (Id. at ¶ 10.) That same year,
the Northern District of California entered an injunction against Goyens, “permanently
enjoin[ing] her from filing, in any United States bankruptcy court, any bankruptcy case or
adversary proceeding, or any document therein.” (Id. at ¶ 11.) Furthermore, in 2007, the U.S.
Trustee for Region 17 (encompassing the Northern District of California, the Eastern District of
California, and the District of Nevada) sought and obtained an order for civil contempt against
Goyens from the U.S. Bankruptcy Court for the Northern District of California. (Id. at ¶ 12.)
That court entered an additional contempt order in 2010. (Id. at ¶¶ 12, 14.)
Returning to New York, in 2013, Judge Lane entered a default judgment and injunction
(the “Permanent Injunction,” Velez-Rivera Decl., Ex. B) against Goyens on the Adversary
Complaint. (Id.) The Permanent Injunction found that:
In a 21-year history of multiple and abusive bankruptcy, civil and
appellate cases filed in her own name and under approximately 45
aliases and names of other individuals, which cases have included
the filing of several burdensome documents, Defendant Goyens
has engaged continually in conduct that is injurious, fraudulent,
unfair and deceptive to creditors, this and other Courts, and the
bankruptcy process.
(Permanent Injunction ¶ 21.) The Permanent Injunction also provided that:
(B) Chaledeeannka Deborah Ann Williams Goyens-Bell Eberwein,
and all persons in concert and participation with her, whether
acting on their own behalves or on behalves of others, and whether
using their own names or one or more aliases hereby are:
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(1) permanently enjoined from filing any new bankruptcy
case or adversary proceeding in this and any other United
States Bankruptcy Court, and
(2) 	permanently 	enjoined 	from 	filing 	any 	document
(including proofs of claim) in any other bankruptcy case or
adversary proceeding without first obtaining leave to file
such document from the United States Bankruptcy Judge
presiding 	over 	such 	bankruptcy 	case 	or 	adversary
proceeding.
(Id. at 11.) Relevant to the present case, the U.S. Trustee alleges that the filing of the Request for
Notice violates the Permanent Injunction.
II. 	LEGAL STANDARD
A. 	Contempt of a Bankruptcy Court’s Orders
“Courts have inherent power to enforce compliance with their lawful orders through civil
contempt.” In re MF Global Holdings Ltd., 562 B.R. 41, 52 (Bankr. S.D.N.Y. 2017). Further,
“bankruptcy courts have power to enter civil contempt orders.” Id. It is well settled that a
bankruptcy court has broad jurisdiction to enforce injunctions. In re Millenium Seacarriers, Inc.,
419 F.3d 83, 97 (2d Cir. 2005) (“Bankruptcy courts retain jurisdiction to enforce their own
orders”). This power derives from the inherent power of the court, along with 11 U.S.C. § 105
and 28 U.S.C. § 157. See Maritime Asbestosis Legal Clinic v. LTV Steel Co. (In re Chateaugay
Corp.), 920 F.2d 183, 187 (2d Cir. 1990); see also Caldwell v. Unified Capital Corp. (In re
Rainbow Magazine, Inc.), 77 F.3d 278, 284–85 (9th Cir. 1996). If a civil contempt proceeding
arises out of a core matter, the contempt proceeding is core. See Mountain Am. Credit Union v.
Skinner, 917 F.2d 444, 447–48 (10th Cir. 1990).
Federal courts consider two factors in determining whether to hold a party in civil
contempt: whether the alleged contemnor had notice of the court order, and whether that person
complied with the order. See In re Keane, 110 B.R. 477, 482–83 (S.D. Cal. 1990). Furthermore,
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with respect to compliance with a specific order, the court may impose civil contempt only
where (1) the underlying order is clear and unambiguous, (2) proof of non-compliance is clear
and convincing, and (3) the contemnor has not been reasonably diligent and energetic in
attempting to accomplish what was ordered. See EEOC v. Local 580, 925 F.2d 588, 594 (2d Cir.
1991); see also MF Global, 562 B.R. at 52–53. In this regard, the “clear and convincing” prong
requires that “[t]he clarity of the order must be such that it enables the enjoined party to ascertain
from the four corners of the order precisely what acts are forbidden.” Monsanto Co. v. Haskel
Trading, Inc., 13 F. Supp. 2d 349, 363 (E.D.N.Y. 1998) (internal citation and quotation marks
omitted). In addition, “[i]n the context of civil contempt, the clear and convincing standard
requires a quantum of proof adequate to demonstrate a reasonable certainty that a violation
occurred.” Levin v. Tiber Holding Corp., 277 F.3d 243, 250 (2d Cir. 2002) (internal citation and
quotation marks omitted). “[T]he defendant must not have diligently attempted to comply with
the order.” In re Chief Exec. Officers Clubs, Inc., 359 B.R. 527, 535 (Bankr. S.D.N.Y. 2007).
III. 	DISCUSSION
Courts apply a two-step test to determine whether a party acted in contempt. Here, the
first factor, whether Goyens had notice of the Permanent Injunction, is plainly met. A notice of
entry of the Permanent Injunction was filed in the Adversary Case as ECF Doc. # 14, and this
evidences that copies of the Permanent Injunction were properly served on Goyens by the U.S.
Trustee. Furthermore, based on the record at the Hearing, this Court has already concluded that
Goyens received adequate notice of the Permanent Injunction and will not revisit that finding
here. (Contempt Order at 2.) The second factor, whether she complied with, or here failed to
comply with, the Permanent Injunction, is satisfied. The Permanent Injunction barred Goyens
from filing “any document,” and Goyens flouted that order by causing to be entered the Request
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for Notice, which is plainly a document. It is uncontested that she chose not to seek relief of this
Court before filing the Request for Notice, which would otherwise excuse her conduct.
A three-step test determines whether courts should impose a contempt sanction for
violating a specific court order. See EEOC v. Local 580, 925 F.2d 588, 594 (2d Cir. 1991); see
also MF Global, 562 B.R. at 52–53. The first step is whether the order—here, the Permanent
Injunction—was clear and unambiguous. Within its four corners, the Permanent Injunction was
crystal clear. It prohibited Goyens from filing “any document” in any bankruptcy case or in any
adversary proceeding.2 Here, Goyens filed the Request for Notice without seeking leave of this
Court beforehand. The second factor, whether proof of non-compliance is clear and convincing,
is plainly satisfied, as Goyens filed the Request for Notice publically on ECF. Finally, Goyens
plainly has not attempted to comply with the Permanent Injunction. The Permanent Injunction is
particularly easy to comply with, because it requires no affirmative action on her part. Goyens
simply had to do nothing. Here, she continues to burden the courts of this District with useless,
vexatious, and irrelevant filings. These filings have zero benefit and unnecessarily burden the
courts and their staff.
Goyens’ earlier conduct, while not necessary for finding that she did not attempt to
comply with the Permanent Injunction, adds context to these facts. Multiple courts have found
her filings to be wholly without merit. Further, other courts have permanently enjoined her from
filing further bankruptcy proceedings and papers. Finally, in this very case, Goyens has
previously contacted this Court’s chambers through the phone system and she has left bizarre,
unintelligible voice messages. The previous vexatious, extraneous, and improper conduct
engaged in by Goyens over many years illuminates to all that this filing is nothing new under the
2 	The Permanent Injunction provided an escape hatch for Goyens if she did, in fact, have legitimate business
with the court. She is permitted to file papers with leave of the court; however, she chose not to exercise this option.
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sun. The Request for Notice is one of many vexatious filings. Because the Permanent Injunction
only required her to refrain from doing something, rather than affirmatively to perform an action,
it is easier to find that the violation of the Permanent Injunction, which required only inaction,
was willful. See generally Patsy’s Brand, Inc. v. I.O.B. Realty, Inc., 2002 WL 1988200, at *3
(S.D.N.Y. Aug. 27, 2002) (trebling compensatory damages when holding a party in contempt
based on noncompliance with an injunction, which required only refraining from copyright
infringement and where no affirmative actions were necessary to comply with the injunction).
The federal courts are not playgrounds and court proceedings are not a game. Vexatious
litigation consumes valuable resources including tax dollars, the cost of processing these filings,
paying judicial employees to process these filings, and most importantly, time. According to
“Table F—U.S. Bankruptcy Courts Statistical Tables For The Federal Judiciary (December 31,
2016)” (available at
http://www.uscourts.gov/sites/default/files/data_tables/stfj_f_1231.2016.pdf), there were 7,778
filings in this District last year, and there are 10,795 cases pending in this District. With nine full
time judges in this District, that averages to over 1,000 pending cases before each judge.
Furthermore, many of these cases are complicated filings that require great attention to detail by
the judges, law clerks, and staff of this District, and they do so ably on a daily basis. While this
District gives its full attention to every case, regardless of its size, these vexatious filings waste
the time of a busy District and serve no benefit to this Court, honest debtors, creditors, or the
public. This particular case is a large case affecting the lives of thousands of people. Courts, of
course, must bear the ultimate responsibility for ensuring that vexatious litigation does not go
forward, but the U.S. Trustee performs an invaluable service in identifying these situations for
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the courts and minimizing the damage otherwise done. Here, the U.S. Trustee has done just that,
and the U.S. Trustee has helped maintain the integrity of the judicial process.
IV. 	CONCLUSION
For the reasons explained above, the Court finds that Goyens willfully violated the
Permanent Injunction and that the Court was justified in issuing the Contempt Order. Based on
Goyens’ repeated disregard for court orders, the Court has little reason to believe that Goyens
will comply with previously issued orders and injunctions in this case or in other cases. The U.S.
Trustee should consider referral to the U.S. Attorney for possible criminal contempt prosecution
in the event of further contumacious conduct.
The U.S. Trustee shall serve a copy of the Contempt Order and this Opinion on Goyens.
Dated: 	July 12, 2017
New York, New York
_____Martin Glenn____________
MARTIN GLENN
United States Bankruptcy Judge
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