We issued a rule pursuant to C.A.R. 21 to show cause why the respondent district court should not be prohibited from entering a judgment for $153,000 plus interest in a contempt proceeding held a year after final judgment had been entered in a case decreeing specific performance. We now discharge the rule.
Lexicon Resources Corporation (Lexicon) sued R. Ronald Schnier (petitioner) in the
In February 1984, Lexicon filed a motion for contempt pursuant to C.R.C.P. 107. Lexicon alleged that although it had complied with all of its obligations under the contract and the court's order, the petitioner had refused to tender the purchase price for the leases, and such refusal constituted disobedience of the court's order which had required the petitioner to pay Lexicon pursuant to the contract. Lexicon requested relief from the petitioner's contempt in the form of monetary sanctions, "including an order requiring [petitioner] ... to pay to [Lexicon] ... the sum of $150,096.45" plus interest and attorney fees.
In March 1984, the parties appeared before the respondent trial court
Petitioner claims that the respondent court lacked jurisdiction to consider the motion for contempt and has converted a judgment for specific performance into a money judgment which would cause him irreparable harm if entered against him.
We first consider whether the respondent trial court had jurisdiction to hear Lexicon's motion for contempt. Second, we consider whether after finding the petitioner in contempt, the trial court could impose a fine against the petitioner equivalent to the damages and expense resulting from the contempt.
It is axiomatic that any action taken by a court when it lacked jurisdiction is a nullity. McLeod v. Provident Mutual Life Insurance Co., 186 Colo. 234, 526 P.2d 1318 (1974). Therefore, we are first faced with the question of whether the respondent court was divested of jurisdiction once the petitioner filed his notice of appeal from the April 1983 judgment, leaving the trial court powerless to consider Lexicon's motion for contempt.
Turning to the facts of the instant case, Lexicon's motion for contempt was filed for the purpose of enforcing its judgment. Lexicon requested the court to impose sanctions, including an order requiring the petitioner to pay the purchase price for the leases pursuant to the April 1983 judgment. The petitioner had not requested a stay of proceedings nor did the trial court order a stay.
The petitioner also contends that even if the respondent court could consider Lexicon's post-trial motion, the proper motion should have been made under C.R.C.P. 70, and not C.R.C.P. 107. We disagree. C.R.C.P. 70 provides a mechanism for vesting title where a judgment directs a party to do so and that party fails to do so within the time specified.
We also note that C.R.C.P. 70 specifically provides that a court "may also in proper cases adjudge the [disobedient] party in contempt." Therefore, even if the rule were applicable, it would not preclude the use of contempt proceedings where one party has suffered injury caused by another who has failed to comply with an earlier order for specific performance for the sale of land.
We believe that the trial court properly considered Lexicon's motion for contempt. "[D]isobedience or resistance of any lawful writ, process, order, rule, decree, or command" of a court constitutes contempt. C.R.C.P. 107(a). Thus, the trial court was empowered to find that the petitioner's failure to comply with its April 1983 order for specific performance constituted contempt.
The final question is whether the trial court, after finding the petitioner in contempt, could impose a fine against him to compensate Lexicon for the damages, costs, and fees it suffered by the contempt. Thus, the narrow issue we decide here is whether the respondent court had the authority to impose this sanction against the petitioner. The remedial purpose and character of the fine establishes that the respondent court's contempt order is properly characterized as civil, not criminal. People v. Barron, 677 P.2d 1370, 1372 n. 2 (Colo. 1984) (civil contempt proceedings are remedial and not intended as a deterrent to offenses against the public, whereas criminal contempt is prosecuted to preserve the power and vindicate the dignity of the court by punishing the contemnor).
Fines are expressly authorized in civil contempt proceedings by C.R.C.P. 107(d)
Where a fine is ordered payable to a party but is in excess of the actual damages plus costs and attorney's fees suffered by reason of the contempt, a trial court exceeds its jurisdiction under C.R. C.P. 107(d). See Blank v. District Court, 190 Colo. 114, 543 P.2d 1255 (1975); Brown v. Brown, 183 Colo. 356, 516 P.2d 1129 (1973). However, a fine in any amount is permissible for vindication of the dignity of the court, but must be payable to the court, not the parties. Brown, 183 Colo. at 360, 516 P.2d at 1132. Therefore, whether or not a fine is properly imposed under C.R.C.P. 107(d) requires an examination of who receives the fine, the person damaged by the contempt or the court, and the amount of the fine.
Here, the fine imposed on the petitioner was payable to Lexicon, the party injured by the contempt, not the court. Therefore, the trial court had the power to impose a fine not exceeding the damages suffered by the contempt, plus costs and attorney's fees associated with the contempt. Without examining the reasonableness and merits of the fine imposed by the trial court, we conclude that if the fine imposed was based on the damages, costs, and fees associated with the petitioner's contempt then the trial court did not exceed its jurisdiction.
A brief examination of a case in which damages were awarded in a contempt proceeding to a party entitled to specific performance under an earlier decree illustrates how damages, costs, and fees caused by a contempt become incorporated into a remedial fine. Bradshaw v. Kershaw, 627 P.2d 528 (Utah 1981). In Bradshaw, the failure of a seller of land and water rights to deliver a well permit as required by an earlier court decree for specific performance left the subject land without water for irrigation. The purchaser initiated contempt proceedings, and, after finding the seller in contempt, the trial court determined that the purchaser had suffered damages of $190,500. The Utah Supreme Court affirmed, finding that the trial court was authorized by Utah's contempt statute to enter the award. The statute provided that if an actual loss or injury to a party in an action or special proceeding is caused by contempt, the trial court "`may order the person proceeded against to pay the party aggrieved a sum of money sufficient to indemnify him and to satisfy his costs and expenses.' "627 P.2d at 532. Attorney's fees and costs awarded in addition to the $190,500 were also upheld.
The fine authorized by C.R.C.P. 107(d), payable to the person damaged by a contempt, also provides for indemnification, but "not exceeding the damages suffered by the contempt, plus the costs of the contempt proceeding, plus reasonable attorney's fees in connection with the contempt proceeding." Therefore, after finding the petitioner in contempt for his failure to comply with the earlier order for specific performance, the trial court was authorized to impose a fine against him within the limits prescribed by the rule. As stated earlier, the record shows that 38 of the 43 leases subject to the order for specific performance had expired since the order was entered. This record supports the conclusion that Lexicon had been damaged by the contempt. In accordance with that conclusion, the trial court did not abuse its discretion in imposing a fine in addition to attorney's fees and costs.
Accordingly, we discharge the rule.