Huffman v. Armenia

This opinion addresses three consolidated appeals from contempt orders issued by the Superior Court of Cobb County in the same case. In Case Nos. A06A2105 and A06A2106, David Huffman challenges two orders in which the trial court found him in contempt of a temporary restraining order. In Case No. A07A0616, Huffman’s attorney, Neil Wilkinson, challenges the court’s order finding him in contempt of the same order and ordering him to pay the appellees $32,000 in attorney fees. For the following reasons, we reverse the trial court’s contempt order in Case No. A06A2105. We affirm the court’s orders in Case Nos. A06A2106 and A07A0616. The record shows the following relevant, undisputed facts. The appellees, Joseph Armenia, Keith Armenia, and Gary Milkwick, are minority shareholders of Home & Equity Loan Products, Inc. “HELP”. Appellant David Huffman is the chairman and president of HELP and a member of the corporation’s board of directors. On December 20, 2005, the appellees filed a verified complaint, directly and derivatively on behalf of the corporation, against HELP’s board of directors1 for, inter alia, breach of fiduciary duty, gross negligence, fraud, civil RICO, and misappropriation of corporate opportunities. The same day, the appellees filed an emergency motion for a temporary restraining order and for the appointment of a receiver to assume control of HELP and another business, Dream Avenue Mortgage Corporation “Dream Avenue”, which is owned by Huffman.

On January 6, 2006, the trial court conducted a hearing on the appellees’ motions. Huffman appeared pro se at the hearing. During the hearing, the court made a verbal ruling appointing a receiver for HELP and Dream Avenue, requiring the HELP directors to cooperate with the receiver, and prohibiting the directors from transferring any corporate assets, doing anything that would deplete the assets, or interfering with the business of HELP and Dream Avenue. On January 19, 2006, the court issued a written order appointing the receiver and restraining Huffman and the other HELP directors from “misappropriating, converting, transferring, or otherwise using or depleting” the assets of HELP hereinafter, the “TRO”.