Defendant Held in Civil Contempt and Fined for Violation of Preliminary Injunction Order

On January 25, 2024, Justice Margaret A. Chan of the New York County Commercial Division, issued a decision in Emigrant Bus. Credit Corp. v. Hanratty, Index No. 158207/2022, granting in part plaintiff’s motion insofar as it sought to hold one of the defendants in civil contempt for violating the court’s prior preliminary injunction order. The Court explained:

Turning to MS 005, to establish civil contempt based on an alleged violation of a court order, the movant must establish, by clear and convincing evidence, that a lawful order of the court expressing an unequivocal mandate was in effect, and that the order was disobeyed with reasonable certainty (Department of Envtl. Protection of City of New York v Dept. of Envtl. Conserv. of State of N. Y., 70 NY2d 233, 240 [1987]). "Intent or willfulness is not required to hold a party in contempt for disobeying a court order or subpoena" (Yalkowsky v Yalkowskv, 93 AD2d 834, 835 [2d Dept 1983]). Instead, the movant must establish that the party to be held in contempt had knowledge of a clear and unequivocal order, failed to comply with its terms, and prejudiced the right of another party through its disobedience (McCain v Dinkins, 84 NY2d 216, 226 [1994]; Garcia v Great Atl & Pac. Tea Co., 231 AD2d 401, 401 ·402 [1st Dept 1996]). Once this showing is made, "the burden shifts to the alleged contemnor to refute the movant's showing, or to offer evidence of a defense, such as an inability to comply with the order'' (El·Dehdan v El·Dehdan, 114 AD3d 4, 17·18 [2d Dept 2013], aff’d 26 NY3d 19 [2015]).

Here, for the reasons set forth during oral arguments and upon consideration of defendants' concessions set forth on the record, the court finds Hanratty in civil contempt and imposes a civil fine of $306,946.30 for failure to comply with the terms and restrictions set forth in the court's preliminary injunction order (NYSCEF # 47 at 8·9) and its preliminary conference order (NYSCEF # 53). Hanratty is directed to pay or cause to be paid $306,946.30 into the parties' joint escrow account by no later than February 7, 2024.

Contact the Commercial Division Blog Committee at commercialdivisionblog@schlamstone.com if you or a client have questions concerning motions for civil contempt.