Washington Courts

The contempt hearing coming up on February 22, 2010 in Bankruptcy Court before Judge Patricia Williams at 1:30 P.M. is more than a tempest in a teapot. What appears to be a minor sort of tiff between attorneys goes to the heart of the legal system. Beneath the surface, a significant matter is at stake – truth telling.

Who are the players? The man who sent the email message of January 13, 2010 is Greg Arpin, an attorney at Paine Hamblen in Spokane who represents the Spokane Diocese (the Reorganization Debtor). The woman who received the email and is threatened by it is Gloria Nagler, an attorney at Nagler & Associates in Seattle. She is the Plan Trustee of the Spokane Diocese Bankruptcy. 

Over the past several months there has been a dispute between the Plan Trustee and the Spokane Diocese regarding the payment of claims regarded as “future tort claims” out of the Plan Trust. The Tort Claims Receiver has received certain claims and has approved them. The Reorganization Debtor (the Spokane Diocese and its attorney Greg Arpin) disputed the payment of some of the claims as claims which have been approved improperly under the plan.

Whether these claims should have been paid or should not have been paid is a question which is winding its way through the judicial system. If the claims were ultra vires claims and they were paid, the Plan Trustee might have personal liability for a breach of her fiduciary duties to the Plan.

There will be more of such claims; claims not a part of the claims proceeding through the appeal process.

The Plan Trustee, apparently, does not have malpractice insurance regarding this potential liability. When she took on the Plan Trustee position she apparently understood that she might be personally liable for breach of trust re payment of ultra vires claims.

The Plan Trustee’s motion for contempt says that the Greg Arpin is threatening her from complying with a court order, the payment of some of the claims approved in the future tort claims category. See Plan Trustee’s Motion for Order to Show Cause . . . and related pleadings.

The court orders did not do away with the Plan Trustee’s liability. Her possible liability is simply a truth, a fact. She has no right to feel threatened by the fact that Mr. Arpin has reminded her of her possible liability. And, even if the court imposes contempt against Mr. Arpin, her liability will not go away. If it exists, it will continue to exist despite an order of contempt.

So here is the interesting point: In coming the court on February 22, 2010 to show cause why contempt should not be imposed, is truth a defense? Or simply put, how can one be held in contempt for simply speaking the truth?

It would not make sense to hold one in contempt for truth speaking.

This case will not be the first to address the issue. For those interested in it the old California case of McClatchy v. Superior Court, 119 Cal. 413, 51 Pac. 696 (1897) might be of some interest. In this case the court cited the editor of a newspaper with contempt for the way a trial was described. The newspaper’s counsel tried to put on testimony that what was said was true. The court rejected the proof which was proffered. On appeal, the case was reversed. Truth is a defense to contempt. See also, Contempt- What Constitutes - Defence-Jurisdiction- Review-Mc- Clatchy v. Superior Court of Sacramento County, 7 Yale L. J. 281 (October 1897-June 1898).