Whitcraft v. Brown

Lois Whitcraft (plaintiff) owned a Picasso painting that her adult son, Jeffrey Bruteyn, hung in his bedroom. On July 2, 2007, the Securities and Exchange Commission (SEC) sued Bruteyn for securities fraud, and the district court issued an order freezing Bruteyn’s assets (the freeze order). Under the order, Bruteyn and anyone working with him, including attorneys, were prohibited from disbursing Bruteyn’s funds, as well as from selling any assets that he owned or that were in his actual or constructive possession. At the same time, the court also appointed William D. Brown (defendant) as receiver of Bruteyn’s estate and issued an order requiring the delivery of Bruteyn’s assets to Brown. On July 5, 2007, Bruteyn met with his attorney, Phillip Offill (plaintiff), to determine whether he could sell the Picasso and live off the proceeds. Though Offill initially hesitated, he eventually advised Bruteyn that selling the Picasso would not violate the freeze order because even though the painting hung in Bruteyn’s bedroom, it was actually owned by Whitcraft. On the same day, Whitcraft gave Bruteyn permission to sell the Picasso, and the sale was executed. The money went into Whitcraft’s account and was made available to Bruteyn. On September 24, 2007, the SEC and Brown filed a motion to hold Bruteyn, Whitcraft, and Offill in civil contempt for violating the freeze order by executing the Picasso sale. The court issued contempt orders against all three. Offill and Whitcraft appealed, and the court of appeal reviewed the order against Offill for abuse of discretion.