Hennepin County District Court File No. 27-CV-07-20736.
Frank W. Visciano (pro hac vice), Senn Visciano Canges P.C, Denver, Colorado; and Charles F. Webber, Adam M. Nodler, Faegre Baker Daniels LLP, Minneapolis, Minnesota (for respondent)
Lewis A. Remele, Jr., Mark R. Bradford, Bassford Remele P.A., Minneapolis, Minnesota (for appellant)
Considered and decided by Kirk, Presiding Judge; Smith, Judge; and Harten, Judge. [*]
On appeal from an order holding him in constructive civil contempt of court and ordering him to be confined with purge conditions to pay judgments in excess of $10 million to respondent, appellant argues that the district court: (1) erred by entering an order requiring him to deliver the judgment amount to respondent; (2) abused its discretion by finding him in constructive civil contempt of court; and (3) abused its discretion by awarding reasonable attorney fees to respondent. We affirm.
In 2007 and 2008, an Oklahoma district court entered two judgments against appellant Andrew C. Grossman in favor of respondent Fannie Mae to enforce Grossman's personal guarantee of a commercial mortgage loan. Fannie Mae docketed the judgments in Hennepin County District Court.
In February 2010, Fannie Mae moved the district court for a temporary restraining order to prevent Grossman from transferring or disposing of any interest in money, property, or other assets he had received or was due to receive as a result of his father's death the previous month. In support of its motion, Fannie Mae submitted a copy of a 2008 deposition where Grossman testified that he might be a beneficiary of his father's trust and that he had transferred assets to a foreign trust after the Oklahoma judgments were entered against him. The district court granted the temporary restraining order and later converted it to a temporary injunction. Grossman appealed the district court's order and this court reversed. In March 2012, the Minnesota Supreme Court affirmed this court, holding that the district court abused its discretion when it issued the temporary injunction because the trust proceeds were not yet in Grossman's possession. Fannie Mae v. Heather Apartments Ltd. P'ship, 811 N.W.2d 596, 601 (Minn. 2012).
On July 24, 2012, Grossman testified in a deposition that his father's trust distributed approximately $11 million to him on May 22, 2012, and that he immediately transferred the money to an account solely in his name at Coutts Bank in Zurich, Switzerland. Grossman testified that he did not have plans to transfer the money and there were no pending orders requiring him to do so. Based on his testimony, Fannie Mae immediately moved the district court for a temporary restraining order. The district court granted the temporary restraining order, which prohibited Grossman from transferring or disposing of any interest he had in the Coutts account. After a hearing, the district court converted the temporary restraining order into a preliminary injunction and ordered Grossman to disclose certain information about the funds in the Coutts account.
In August, Fannie Mae moved the district court under Minn. Stat. § 575.05 (2012) for an order to apply some of Grossman's property in satisfaction of the judgment against Grossman. During the same time period, Grossman provided Fannie Mae with a letter that disclosed the information about the Coutts account required by the district court's preliminary injunction order. In response to the question of whether Grossman "presently has funds with Coutts & Co. in accounts held solely in his name, " Grossman responded, "Yes." Later that same day, Grossman amended his answer to that question, stating, "To the best of my knowledge, yes." In response to the question of "[w]hether any such funds have been transferred since Grossman's July 24, 2012 deposition, " Grossman responded, "No."
In September, the district court ordered Grossman to issue a request to Coutts Bank to transfer the judgment amount from Grossman's account to Fannie Mae. Grossman sent a letter to Coutts Bank requesting that it wire $7, 099, 620.16, plus $835.30 per day from August 15 through September 4, from his account to Fannie Mae. Coutts Bank responded by letter in October, stating that it was "not in any position to do the requested payment as your account has not sufficient balance." An attached balance statement revealed that the account had a zero balance.
Fannie Mae filed an emergency motion requesting that the district court reaffirm its preliminary injunction order, order Grossman to deliver the money under threat of contempt, and require Grossman to provide information to the district court about when, by whom, and to where the money was transferred. After a hearing, the district court issued an order on November 8 ...