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Melikhov v. Drab

United States District Court, M.D. Florida, Fort Myers Division

September 24, 2019

ANTHONY MELIKHOV, MELMAR HOLDINGS, LLC and U4G GROUP, LLC, Plaintiffs,
v.
LADISLAV DRAB, CE GROUP, CESKA ENERGIE, CESKA PLYNARESKA, NAPLES ENERGY, LLC, HANA DRABOVA and CZECH ENERGY USA, LLC, Defendants.

          OPINION AND ORDER [1]

          SHERI POLSTER CHAPPELL UNITED STATES DISTRICT JUDGE

         This matter comes before the Court on the Honorable Mac R. McCoy’s Report and Recommendation and Certification of Facts (Doc. 35), certifying facts in support of his recommendation that Plaintiffs-Judgment Creditors Anthony Melikhov, Melmar Holdings LLC, and U4G Group LLC’s (hereinafter “Plaintiffs” or “Judgment Creditors”) Motion for Contempt and Sanctions Against Nonparties Hana Drabova, Naples Energy LLC, and Czech Energy USA LLC (hereinafter “Nonparties”) (Doc. 4) be granted. No objections have been filed and the time to do so has expired. Nonetheless, in accordance with 28 U.S.C. § 636(e)(6)(B)(iii), the Court held an evidentiary hearing on September 23, 2019, for the Nonparties to show cause why they should not be adjudged in contempt and/or sanctioned by reason of the facts so certified. (Doc. 37). Counsel for the Judgment Creditors and the Nonparties appeared at the hearing.

         On August 2, 2019, the Court issued its Order setting the show cause hearing. (Doc. 37). In its Order, the Court ordered Nonparty Hana Dabrova to appear in person at the hearing and warned her that her failure to appear at the show cause hearing could result in the issuance of a bench warrant for her arrest. However, Dabrova failed to appear even though her counsel[2] stated at the hearing that she was aware of the proceedings. Her counsel stated that she did not appear because she was denied a visa to travel to the United States from the Czech Republic on September 19, 2019 (only four days before the hearing). What makes Dabrova’s late attempt to travel incredible is that the Order setting the hearing (and warning her that her failure to appear could result in her arrest) was issued on August 2, 2019, and the show cause hearing was originally set for September 6, but was rescheduled to the 23rd. Thus, Dabrova had more than enough time to make travel arrangements to appear in person at the hearing if she was making any credible attempt to do so, and she was provided more than adequate notice that she could be arrested if she failed to appear. However, she failed to heed the Court’s warnings.

         The Court having carefully reviewed and considered the parties filings, having heard oral argument from counsel, and otherwise receiving evidence at the hearing, finds that the Motion for Contempt and Sanctions is granted for the reasons set forth below.

         BACKGROUND

         The Court accepts and adopts Judge McCoy’s Certification of Facts (Doc. 35, Sec. I). This action involves the registration of a foreign judgment, and the Judgment Creditors seek compliance with document subpoenas[3] issued to the Nonparties in aid of execution of the judgment. The underlying judgment in a case involving a business deal gone bad was entered in the Northern District of Illinois for $36, 711, 232.88 (plus interest) against Ladislav Drab, CE Group, Ceska Energia A.A., and Ceska Plynareska A.S. on January 26, 2018. (Doc. 1). Nonparty Hana Drabova is the wife of Ladislav Drab and the managing member of Naples Energy (Drab was the managing member of Naples Energy at the time of the transactions at issue in the underlying litigation; however, management was transferred to Drabova).[4] Drab has not appeared in this matter.

         In aid of execution on its foreign judgment, the Judgment Creditors request that the Court do four things: (1) find the Nonparties in contempt for their failure to comply with the document subpoenas; (2) compel the Nonparties to produce the requested documents; (3) impose sanctions against the Nonparties for their pro rata share of the Judgment Creditors’ attorneys’ fees and costs incurred in bringing the Motion; and (4) warn the Nonparties that failure to comply with the order may result in additional sanctions, “including civil fines, attorneys’ fees and costs, evidentiary sanctions, and other appropriate remedies available to the Court to compel compliance.” (Doc. 4).

         After two Orders to Show Cause issued by Judge McCoy and two hearings, the Nonparties still failed to comply with the subpoenas and offered insufficient responses to the Motion for Contempt (Doc. 4). In his two Orders to Show Cause (Docs. 6, 16), Judge McCoy specifically ordered the Nonparties to comply with the subpoenas. Judge McCoy warned the Nonparties that any failure to comply with his Orders could result in a finding of contempt and sanctions, including the issuance of a bench warrant to ensure compliance. Notably, nonparty Hana Drabova was warned by Judge McCoy that her failure to appear in person at his show cause hearing would not be excused for any reason short of a medical emergency. Still, Drabova failed to show at either hearing before Judge McCoy with no excusable explanation provided by her counsel other than she was in the Czech Republic and could not secure a flight.

         Following the two show cause hearings, Judge McCoy advised the parties that he would take the matter under advisement and would consider a further proceeding whereby Nonparty Drabova and Defendant Ladislav Drab would be required to explain under oath what steps they had taken to identify responsive documents in response to the subpoenas and why they maintained that there were no further documents despite the fact that on the face of the Nonparties’ responses, objections, and affidavits it appeared that there were. (Doc. 35 at 11).

         Notably, Judge McCoy stated that it remained unclear whether the Nonparties have produced all documents within their possession, custody, or control, but it would appear based on the evidence before him that there may be other responsive documents that have not been produced. (Doc. 35 at 13 (citing Doc. 32 at 4-5)). The evidence presented by the Judgment Creditors is at Document 32, wherein the creditors noted that their search of publicly-available documents has revealed that Naples Energy holds title to Florida real property where Drab and Drabova reside and Naples Energy holds title to a condominium that it recently sold with the sales proceeds transferred to Drabova. However, no documents reflecting the transfer of the sale proceeds to Drabova on behalf of Naples Energy were produced even though they were responsive to the subpoena requests. The evidence at Doc. 32 seriously calls into question the veracity of the Nonparties’ affidavits stating that they were aware of no additional documents that were responsive. (Doc. 31-1 at 1; Doc. 31-2 at 1-2; Doc. 31-3 at 1-2). Therefore, the Judgement Creditors became rightfully concerned that the Nonparties have been transferring funds or shifting assets in an effort to frustrate their efforts to collect on the underlying foreign judgment.

         Counsel for the Nonparties stated at the second show cause hearing that based upon the evidence provided in Doc. 32 it would appear that the Nonparties’ responses were incomplete, but he had not had the opportunity to speak with Drabova about the evidence provided in Doc. 32, but that he intended to do so.[5] In any event, Judge McCoy indicated that he was not inclined to give the Nonparties’ counsel additional time to question his clients regarding the existence of more documents because it was unlikely to result in satisfactory compliance. (Doc. 35 at 11). Judge McCoy held no further proceedings and lacking the authority to resolve the contempt issue, see 28 U.S.C. § 636(e)(6), he certified facts to the District Court as to the proceedings before him and recommends that the Court grant the request for contempt because nothing short of contempt would ensure the Nonparties’ compliance. (Doc. 35).

         The undersigned held a show cause hearing to allow Drabova to explain why she should not be sanctioned and/or held in civil contempt. Drabova was directed to appear in person and bring any documents or other evidence that complies with the subpoenas and be prepared to testify under oath as to same, but she failed to appear. (Doc. 37). Plaintiffs submitted 71 exhibits (Docs. 44, 46) at the hearing that were admitted by the Court without objection. Plaintiffs’ counsel stated at the hearing that the exhibits are further evidence that the Nonparties are shifting assets in an effort to thwart any collection efforts and that the Nonparties have documents responsive to the subpoenas that they are not producing. Although provided the opportunity to do so, counsel for the Nonparties presented no evidence to the contrary.

         STANDARD

         A district judge “may accept, reject, or modify in whole or in part, the findings or recommendations made by the magistrate judge.” 28 U.S.C. § 636(b)(1). The district judge “shall make a de novo determination of those portions of the report or specified proposed findings or recommendations to which objection is made.” Id. And “[t]he judge may also receive further evidence or recommit the matter to the magistrate judge with instructions.” Id.

         Pursuant to 28 U.S.C. § 636(e)(6), if a magistrate judge determines that an act constitutes civil contempt, he shall:

Forthwith certify the facts to a district judge and may serve or cause to be served, upon any person whose behavior is brought into question under this paragraph, an order requiring such person to appear before a district judge upon a day certain to show cause why that person should not be adjudged in contempt by reason of the facts so certified. The district judge shall thereupon hear evidence as to the act or conduct complained of and, if it is such as to warrant ...

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