Civil Contempt Against Debtor Not Stayed by Bankruptcy Petition

American Bankruptcy Institute Law Review Staff

 

 

Weighing in on a three-way circuit court split, the Sixth Circuit recognized anon-statutory exception to the automatic stay, in Dominic’s Restaurant of Dayton, Inc. v. Mantia, and allowed a civil contempt proceeding to continue against a debtor.[1] In 2007, the Mantia family closed their family-run restaurant, Dominic’s, but continued to market certain food products under the name “Dominic’s Foods of Dayton.”[2] Soon after the restaurant closed, Christie Mantia sold her interest in the original Dominic’s Restaurant and planned with Reece Powers and Harry Lee to open a restaurant, name it Dominic’s Restaurant, Inc., and use the old Dominic’s recipes.[3] The owners of the original Dominic’s Restaurant (“Plaintiffs”) brought trademark infringement and trademark dilution claims against Mantia, Powers, and Lee (“Defendants”).[4] The district court issued a TRO and then a preliminary injunction (the “Injunctions”) directing Defendants to cease using the Dominic’s name and graphics.[5] After Plaintiffs filed a series of contempt motions against Defendants based on Defendants’ violation of the Injunctions, the district court granted a default judgment and the contempt motion against Defendants.[6] Although Powers filed for personal bankruptcy in the midst of this, the district court declined to stay the judgments against him.[7]