Selected Decision: Contempt. Sidebottom v. Watershed Equine, LLC

Sidebottom v. Watershed Equine, LLC 

Opinion by Judge D. Lambert; Judges Taylor and Thompson concurred. 

Appellant challenged an order holding him in contempt. Appellant settled a dispute with appellee wherein he agreed to pay $18,000, plus post-judgment interest. When appellant failed to pay, appellee sought post-judgment discovery regarding the amount owed. The day before a scheduled deposition, appellant sent counsel for appellee an email reply explaining his unavailability. When he did not show for the deposition, appellee filed a show cause motion with the circuit court, and a hearing was held on that motion. During the hearing, appellant testified as to his financial situation and his assets. He also admitted his failure to make payments in accordance with the payment schedule outlined in the settlement agreement. The circuit court orally determined that appellant had sufficient assets to pay the amount of the original settlement. There was also an oral finding that appellant could pay the respective fees and costs for appellee to bring the show cause motion. The circuit court subsequently entered a written order finding appellant in contempt of court, but it allowed him to avoid imprisonment if he paid $22,013.12, the total amount owed, within thirty days. On appeal, appellant claimed that he was wrongly held in contempt for failing to attend the deposition. He also claimed that his constitutional rights were violated because he faced incarceration for failing to pay a debt. The Court of Appeals agreed, the contempt order was vacated, and the case was remanded for a new hearing. The Court first held that the circuit court failed to make sufficient written findings regarding appellant’s ability to pay the judgment against him. The Court then held that requiring appellant to either pay a money judgment balance or be placed in jail violated § 18 of the Kentucky Constitution, which restricts imprisonment for a debt owed in order to prevent the resurgence of debtor prisons. The Court noted that appellant’s alleged violation was failing to appear for a post-judgment deposition, a discovery abuse. Therefore, a proper sanction would have been one authorized under CR 37.04, which allows a court to enforce any just sanction against a party who has failed to appear at a deposition after receiving proper notice. Forcing appellant instead to pay the full judgment amount within an arbitrary time period or face imprisonment was an abuse of the circuit court’s discretion. 

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