The opinion of the court was delivered by: Magistrate Judge Morton Denlow
MEMORANDUM OPINION AND ORDER
Plaintiffs Mike Shales, John Bryan, Sr., Al Orosz, Dan Brejc, Toby Koth, and Vern Bauman, as Trustees of The Fox Valley Laborers' Health and Welfare Fund, and Mike Shales, John Bryan, Sr., Al Orosz, Toby Koth, Vern Bauman, and Dan Brejc, as Trustees of The Fox Valley Laborers' Pension Fund (collectively "the Funds" or "Plaintiffs"), bring this action seeking an Order of Contempt directed personally at Thomas Manning ("Manning" or "Respondent"), President and sole shareholder of T. Manning Concrete, Inc., ("the Company"or "Defendant") for his failure to abide by a citation to discover assets served on the Company and for personally causing and allowing the transfer and disposition of T. Manning Concrete, Inc.'s assets in violation of the citation.
The Funds ask that a judgment be entered against Manning individually in the amount of $199,010.28.*fn1 This represents: $139,000 of Respondent's personal funds that he put into a client trust account and used to pay the Company's payroll after the Company's bank account at Golden Eagle Community Bank was frozen; $41,700.78 in funds that were paid out of the Company's Golden Eagle Community Bank account after the citation was served on the Company, but before that account was frozen by a separate citation served on the bank; and $18,309.50 in attorney fees and costs. Tr. 10; Dkt. 95 ¶4*fn2 .
The Court held an evidentiary hearing on February 8, 2012. Dkt. 92. At the hearing two witnesses testified: 1) Thomas Manning, President of T. Manning Concrete, Inc.; and 2) Dennis Ward, registered agent and accountant for T. Manning Concrete, Inc. Counsel presented closing arguments on February 10, 2012. Dkt. 94. The Court has carefully considered the parties' briefs, the testimony of the two witnesses, the parties' trial exhibits, the parties' joint stipulation of facts, and the opening and closing arguments of counsel. The following represent the Courts's findings of facts and conclusions of law. To the extent certain findings of fact may be deemed conclusions of law, they shall also be considered conclusions. Similarly, to the extent matters contained in the conclusions of law may be deemed findings of fact, they shall also be considered findings.
A. ISSUANCE OF THE CITATION TO DISCOVER ASSETS.
1. Tom Manning is and was the President and sole shareholder of T. Manning Concrete, Inc., for all relevant periods of time. Stip. 10*fn3 ; Tr. 23.
2. On August 3, 2011, this Court entered an agreed judgment in favor of Plaintiffs and against T. Manning Concrete, Inc., in the amount of $5,941,720.15. Dkts. 39, 40.
3. In an attempt to collect the judgment, Plaintiffs instituted supplementary proceedings in the form of citations to discover assets directed to PNC Bank, The National Bank, Mid America Bank, T. Manning Concrete, Inc., Harris Bank, and American Community Bank & Trust seeking to prevent the transfer or disposition of Defendant's assets. Dkt. 43.
4. This contempt proceeding arises out of the citation to discover assets served upon defendant T. Manning Concrete, Inc. On August 17, 2011,*fn4 this Court issued a citation to discover assets against T. Manning Concrete, Inc., (the "Citation") for the $5,941,720.15 judgment. Stip. Ex. A.
5. The Citation stated in relevant part:
T. MANNING CONCRETE, INC., IS PROHIBITED from making or allowing any transfer or other disposition of, or interfering with, any property not exempt from execution or garnishment belonging to T. MANNING CONCRETE, INC., that it may be entitled to or that may be acquired by or become due to it and from paying over or otherwise disposing of any money not so exempt, that is due or becomes due to T. MANNING CONCRETE, INC., until further order of court or termination of the proceedings.
Id. (emphasis in original).
6. The Citation return date was September 13, 2011, and in addition to the prohibition regarding the transfer or disposition of assets, it directed Tom Manning, as President of T. Manning Concrete, Inc., to appear at the office of Plaintiffs' attorney to be examined under oath and to bring certain books, records and documents reflecting T. Manning Concrete, Inc.'s assets and financial status. Id.
B. SERVICE OF THE CITATION TO DISCOVER ASSETS UPON DEFENDANT.
1. Dennis Ward, Registered Agent
7. On August 18, 2011, counsel for The Funds caused a copy of the Citation to be mailed by Certified Mail to Dennis Ward, the Defendant's registered agent addressed as follows:
Dennis Ward, Reg Agent 1250 Larkin Avenue Suite 200 Elgin, IL 60123.
8. Dennis Ward ("Ward") was the registered agent for Defendant at the time of service. Ward is a partner in the accounting firm of Ward, Lane & Associates, with its office located at 1250 Larkin Avenue, Suite 200, Elgin, IL 60123. Stip. ¶4. On August 19, 2011, Jackie Schroeder, an accountant employed by Ward, Lane & Associates, accepted and signed for the certified letter addressed to Dennis Ward, Registered Agent. Stip. ¶5, ¶6; Stip. Ex.
B. On August 19, 2011, Ward received and reviewed the envelope's contents and determined that it was a Citation to Discover Assets for T. Manning Concrete, Inc. Tr. 88-89; Pls.' Ex. B; Stip. ¶8.
9. On August 19, 2011, Ward participated in two telephone conversations with attorneys from Laner, Muchin, Dombrow, Becker, Levin and Tominberg, Ltd. ("Laner Muchin"), the Company's counsel. Pls.' Ex. B., p. 3. The first telephone conversation was about "seizure of assets" and included: Ward; Michelle Reynolds, counsel for the Funds; and Will Daniels ("Daniels")*fn5 and Scott Gore ("Gore") of Laner Muchin. Id.; Tr. 30. The second telephone conversation was between only Ward and Daniels and addressed "the Fund's recent action to freeze the assets of T. Manning Concrete and the Company's inability to pay payroll." Pls.' Ex. B, p. 3.
10. Later in the day on August 19, Ward sent a facsimile to Gore and Daniels at Laner Muchin. Tr. 88-89; Pls.' Ex. B, p. 6.In the cover letter, Ward wrote: "Copies of what I Received [and] what Bank Received, As Discussed" and signed his initials. Pls.' Ex. B, p. 6; Tr. 109. Three documents were attached to the facsimile. The first document was a copy of the third party citation to discover assets issued to National Bank. Id. at p. 7-10. The second document was a copy of the original complaint in the case. Id. at p. 17-20. The third documentwas the Citation directed to T. Manning Concrete, Inc. which he received as registered agent. Id. at p. 21-27. As of August 19, 2011, Ward clearly understood that the assets of the Company were frozen and payroll could not be paid from Company assets. The Court rejects any testimony to the contrary offered by Ward.
11. On either August 22 or 23, 2011, Ward placed a phone call to Manning. Tr. 91. Ward was upset that the Citation required the production of twelve categories of documents. Tr. 91-93. At the time of this conversation, the Company was required not to transfer or dispose of its assets.
12. Ward's testimony was not credible in several important respects. Ward testified that he did not understand the nature of a citation to discover assets and that he did not understand that the Citation prohibited someone from transferring assets of the Company. Tr. 95. This was in direct contradiction of his earlier deposition testimony during which he testified that he understood that the Citation prohibited T. Manning Concrete from transferring or distributing assets of the Company. Tr. 96. The Court finds that Ward was impeached at trial on this issue. Ward also testified that he read through the first nine or ten items on the list of twelve document categories that were to be produced on the return date, which were in normal font. Tr. 113-14. The very next paragraph of the Citation is in bold font and begins with "T. MANNING CONCRETE, INC., IS PROHIBITED..." It is not credible that Ward did not read the bold and partially capitalized prohibition. As an accountant for over thirty years, Ward understood the plain language of the Citation which clearly prohibits any transfers or disposition of Company property. His testimony to the contrary was simply not credible. T. 114-15.
2. Thomas Manning, President
13. On August 18, 2011, counsel for the Fund also caused a copy of the Citation to be mailed by certified mail addressed as follows:
T. Manning Concrete, Inc.
C/o Tom Manning, President 11804 S IL Route 47 Huntley, IL 60142-9662 Stip. ¶9. 11804 S IL Route 47, Huntley IL 60142-9662 was the business address of T. Manning Concrete, Inc., for all relevant periods of time and the Company generally received mail at that address. Stip. ¶11. On August 22, 2011, the Citation was delivered to T. Manning Concrete, Inc. by the United States Postal Service and Nicole Frohling, an employee of the Company, signed a receipt. Stip. ¶ 13.
14. Prior to August 23, 2011, Manning was advised by representatives of one or more banks at which the Company then had operating accounts that the Funds had served one or more third-party citations to discover assets that froze the Company's accounts there. Id.
15. On August 22 or 23, 2011, Manning and Ward had a discussion regarding the citation that Ward received. On August 22, 2011, Manning had a conversation which lasted approximately thirty minutes with Gore at Laner Muchin regarding the "bank issue." Pls.' Ex. B, p. 5; Tr. 31. As of August 22, 2011, at the very latest, Manning was personally aware that the Funds had taken steps to freeze the bank accounts of T. Manning Concrete, Inc. and payroll could not be paid as scheduled. Id.; Tr. 78-79. Further, as of August 22, 2011, Manning was aware of and had seen the Citation. It is not credible that the Citation delivered to the Company's address in the care of Tom Manning would have been blindly forwarded to the Company's attorneys without Manning having reviewed the Citation or being advised that the Citation had been received. Manning has demonstrated a pattern of seeking to avoid orders of this Court, such as failing to disclose all bank accounts in an affidavit in which he was required to do so by court order. Tr. 52-54. Manning's credibility regarding whether he knew about the citation before he opened the Golden Eagle Community Bank account is also cast into doubt based on inconsistencies between his answers to a request to admit issued by the Funds in January 2012 and his testimony at the hearing. Tr. 57-59. For example, in the request to admit, Manning denied that he had knowledge of the Citation prior to August 23, 2012, but at the hearing indicated that he could not remember. Tr. 57. In the request to admit, Manning denied that he spoke to Gore prior to August 23, 2012, but at the hearing admitted that he must have spoken to Gore on August 22, 2012. Tr. 58. In the request to admit, Manning denied that he had received, reviewed, or knew about the Citation prior to opening the Golden Eagle account. Id. At the hearing, he admitted he knew of the document but continued to assert he did not know that the Citation prevented him from issuing payroll from Company funds. Tr. 58-59.
16. Manning testified that if he had read the Citation, he would have known that paying the wages was not appropriate, indicating that the language of the Citation is a clear and unequivocal command ...