CIVIL CONTEMPT AIMS TO COMPENSATE THE OTHER PARTY FOR ANY LOSS ASSOCIATED WITH THE CONTEMPT (FAILURE TO COMPLY WITH A COURT ORDER); CRIMINAL CONTEMPT AIMS TO PUNISH; THEREFORE A $250 A DAY FINE, ALTHOUGH APPROPRIATE FOR CRIMINAL CONTEMPT, WAS NOT APPROPRIATE FOR THE CIVL CONTEMPT AT ISSUE HERE (FOURTH DEPT).

The Fourth Department, reversing Supreme Court, determined fining defendants $250 a day for civil contempt was not appropriate. Civil contempt, unlike criminal contempt, is designed to compensate the other party for any loss, not to punish. The matter was remitted for a determination of any losses to plaintiffs associated with defendants’ contempt. Defendants had ignored a court order requiring that the contested reservation fee (over $700,000) be placed in escrow to prevent defendants from dissipating it:

“Unlike criminal contempt sanctions which are intended to punish, civil contempt fines are intended to compensate victims for their actual losses” … . Plaintiff did not establish an actual loss or injury as a result of the contempt … , and therefore Judiciary Law § 773 authorized the court to impose “a fine . . . not exceeding the amount of the complainant’s costs and expenses, and two hundred and fifty dollars in addition thereto.” Under these circumstances, the fine of $250 per day until the contempt was purged is not authorized by the statute and improperly sought to punish defendants for their continuing contempt, rather than to compensate plaintiff for an amount of damages suffered … . Rpower, LLC, 2024 NY Slip Op 03598, Fourth Dept 7-3-24

Practice Point: Civil contempt aims to address the contempt of the opposing party by compensating for the loss caused by the contempt. Criminal contempt, on the other hand, is designed to punish a party for failing to obey a court order. A fine is therefore appropriate for criminal contempt, but not for civil contempt.