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Dissolved Air Floatation Corp. v. Kothari

United States District Court, E.D. Wisconsin

July 9, 2019

DISSOLVED AIR FLOTATION CORPORATION and ACCURATE MECHANICAL CONTRACTORS, INC., Plaintiffs,
v.
BHARAT KOTHARI and RUDY PETERS, Defendants.

          ORDER

          William C. Griesbach, Chief Judge United States District Court

         This case originated as a breach of contract dispute within the court's diversity jurisdiction and is currently before the court on Plaintiffs' May 7, 2019 motion for contempt requesting that the court hold Defendants in contempt and order sanctions up to and including incarceration. For the following reasons, Plaintiffs' motion will be partially granted.

         BACKGROUND

         Plaintiffs Dissolved Air Flotation Corporation and Accurate Mechanical Contractors, Inc. filed this action in October 2014 alleging breach of contract, conspiracy, injury to business, promissory estoppel, and various misrepresentation claims against Defendants Bharat Kothari, Rudy Peters, and DAF Technology, LLC based on Defendants' failure to produce the $2, 000, 000 purchase price after buying Dissolved Air's business. On December 1, 2016, the court granted Plaintiffs' motion for partial summary judgment and ordered that Defendants pay $12, 431.82 as a result of the costs and fees incurred by Defendants' default. Dkt. No. 72. On July 11, 2017, based upon the parties' stipulation, the court ordered that a judgment shall be entered against Defendants Kothari and Peters, jointly and severally, in the amount of $1, 000, 000.00 and dismissing DAF Technology LLC with prejudice and without costs. The court also ordered that Kothari provide a sworn statement identifying all assets owned by him and execute such documentation as is necessary to grant to Plaintiffs a first priority lien against the real estate located at 2 North Broadway in Aurora, Illinois within fourteen days of the date of the order. Dkt. No. 94. Judgment was entered the following day. Dkt. No. 95.

         On October 10, 2017, Plaintiffs filed their first motion for contempt, seeking an order against Defendant Kothari for contempt for his failure to pay the sum of $12, 431.82 and to provide any of the documentation that the court ordered he produce in its July 11, 2017 order. Dkt. No. 96. On November 9, 2017, the court ordered Defendants to appear in person before the United States District Court for the Eastern District of Wisconsin in Green Bay on November 21, 2017, at 1:30 P.M. to show cause why they should not be held in contempt for violating the court's orders. Dkt. No. 101. The court warned that Defendants' failure to appear or failure to show cause may result in the imposition of a warrant for their arrest. Id. at 2.

         Although Kothari appeared at the November 21, 2017 show cause hearing, Peters was not present. The court advised that if Kothari wished to avoid contempt and not return to court, he should complete the discovery that Plaintiffs requested. The court ordered that all discovery responses were to be submitted by December 22, 2017. As to Peters, the court held the matter open until December 22, 2017, and noted that if Peters did not appear or cooperate with Plaintiffs, the court would hold him in contempt. Dkt. No. 104. On December 7, 2017, the court ordered that the matter of contempt against Defendants for failure to comply with the court's orders be held open until December 22, 2017, to allow Defendants to complete the discovery served. The court noted that if Defendants failed to comply with the court's order, counsel for Plaintiffs could file a request for further proceedings at which time the court would consider the imposition of sanctions until compliance occurs. Dkt. No. 105.

         On June 7, 2018, the court entered an order holding open the matter of contempt against Defendants for failure to comply with the court's orders. The court advised that, to avoid further proceedings, Defendants shall provide all documentation requested of them pursuant to the discovery served upon them or, in the alternative, a detailed explanation of what requested documents are not provided and why; and Kothari shall provide responses to the Second Set of Discovery served upon him by July 17, 2018. The court noted that if Defendants failed to comply by July 17, 2018, counsel for Plaintiffs could file a request for further proceedings at which time the court would consider whether Defendants are in contempt and whether sanctions should be imposed. Dkt. No. 109. Defendants filed a motion for an extension of time to file answers to discovery on July 17, 2018. Dkt. No. 110. The court granted the motion and ordered that Defendants complete the requirements by August 14, 2018, or risk a fine or jail term. Dkt. No. 111.

         On October 22, 2018, the court granted Plaintiffs' motion for miscellaneous relief and directed Defendant Kothari to provide the following information:

A. Full, written and sworn, responses to Plaintiffs' Second Set of Written Discovery to Bharat Kothari.
B. All documents requested in Plaintiffs' Second Set of Written Discovery to Bharat Kothari including, but not limited to, all documents requested in Requests for Production of Documents 14-15 including:
1. Tax Transcripts from 2010 to Present; 2. Any documents identified in a Request for Admission or Interrogatory.
C. A list of all professional books identified in Request for Production Number 58 to Plaintiffs' Corrected Collection Discovery to Bharat Kothari; D. A copy of the Title to the automobiles pursuant to Request for Production Number 60.
E. A copy of the legal description for the real estate in which Kothari owned an interest in as of the date of judgment pursuant to Request for Production Number 63.

See Dkt. No. 119 at 2. The court also directed Defendant Peters to provide his 2017 IRS Tax Returns or such documentation as may permit Plaintiffs to actually receive information regarding the same. Id. The court noted that Defendants' failure to provide this information within thirty days of the date of the order without good cause may result in a finding of contempt and sanctions up to and including incarceration until Defendants comply with the order and ...


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