Chemline Inc. v. Mauzy

• Decision Date: 02 March 2021
• Docket Number: No. ED 108603,ED 108603
• Citation: 618 S.W.3d 701
• Parties: CHEMLINE INCORPORATED, Respondent, v. Timothy MAUZY, Appellant.
• Court: Missouri Court of Appeals

618 S.W.3d 701

CHEMLINE INCORPORATED, Respondent,

v.Timothy MAUZY, Appellant.

No. ED 108603

Missouri Court of Appeals, Eastern District, DIVISION TWO.

Filed: March 2, 2021

Jon A. Bierman, Kelly J. Muensterman, 100 South Fourth Street, Suite 1000, Saint Louis, MO 63102, for appellant.

Matthew A. Jacober, Brooke M. Wheelwright, Lauren M. Wacker, Emily E. Cantwell, 7701 Forsyth Boulevard, Suite 500, Clayton, MO 63105, for respondent.

Robin Ransom, Presiding Judge

Introduction

Timothy Mauzy ("Mauzy") appeals from the trial court's judgment finding him in contempt of an injunction order that prohibited him from contacting certain customers from his previous employment with Chemline Incorporated ("Chemline"). The contempt judgment also assessed a $2,000.00 compensatory fine based on this contemptuous conduct and awarded Chemline $6,000.00 in attorneys’ fees. Mauzy asserts three points on appeal, arguing the trial court erred in: finding him in contempt because the injunction order did not clearly, unambiguously, and expressly prohibit his complained-of conduct (Point I); assessing the compensatory fine because there was no evidence that Chemline suffered actual damages (Point II); and awarding attorneys’ fees to Chemline because Mauzy did not violate the injunction order (Point III). We affirm in part and reverse and remand in part for further proceedings consistent with this opinion.¹

Factual and Procedural Background

For over five years, Mauzy was employed by Chemline as a sales representative. Chemline required its sales representatives to enter into restrictive covenants, which included non-competition and non-solicitation provisions. In May of 2018, Mauzy left his employment with Chemline and began working in a sales capacity at IXS Coatings. Both IXS Coatings and Chemline are in the business of providing custom coatings for use in industrial and commercial applications and are direct marketplace competitors.

In December of 2018, Chemline filed a petition for injunctive relief and damages based on allegations that Mauzy had violated the non-competition and non-solicitation provisions of his employment agreement. On March 11, 2019, the trial court entered an order of permanent injunction ("the Order") prohibiting Mauzy from, in relevant part, contacting five customers with whom Mauzy had a relationship during his employment at Chemline: Albers Spray Solutions, Benchmark Foam, the Protective Group/Point Blank, BP Surface Solutions, and Alberts Industrial Coatings. It is undisputed that Mauzy contacted individuals who were employed by these customers during the twelve-month period covered by the Order. Testimony found credible by the trial court established that: Mauzy met Matt Frey ("Frey") of Benchmark Foam in person on or about July 10, 2019, and otherwise contacted Frey over thirty times; and Mauzy contacted Clay Butler of BP Surface Solutions and was contacted by Seth Albers of Albers Spray Solutions.

On July 19, 2019, Chemline filed a motion for contempt and to show cause alleging that Mauzy's interactions with Frey constituted a willful violation of the Order. The trial court found that Mauzy engaged in willful disobedience of the Order, entered a judgment of contempt, and awarded Chemline $6,000.00 in attorney's fees. The trial court also ordered Mauzy to pay a $2,000.00 compensatory fine to Chemline after finding that Mauzy had interfered with Chemline's business relationships, despite also finding "that Chemline cannot demonstrate a quantified diminution in their business sales as a result of [Mauzy's] complained-of conduct."

This appeal follows.

Standard of Review

We review a contempt judgment under the same standard as other court-tried matters, announced in Murphy v. Carron , 536 S.W.2d 30, 32 (Mo. banc 1976). Wuebbeling v. Wuebbeling , 574 S.W.3d 317, 327 (Mo. App. E.D. 2019). That is, we will affirm the judgment unless it is not supported by substantial evidence, it is against the weight of the evidence, or it erroneously declares or applies the law. Id. On review, we defer to the trial court's credibility determinations and recognize the trial court is free to accept or reject all, part, or none of the testimony presented. Id. We view the evidence and inferences therefrom in the light most favorable to the judgment and we will affirm if the judgment can be sustained on any ground supported by the record. Id. Moreover, "we will not reverse the trial court's ruling on a civil contempt motion absent a clear abuse of discretion." Id. An abuse of discretion occurs when the trial court's ruling is clearly against the logic of the circumstances and is so arbitrary and unreasonable as to shock our sense of justice and indicate a lack of careful consideration. Id.

Discussion

Point I

In his first point on appeal, Mauzy argues the trial court erred in finding him in contempt because his complained-of conduct was not clearly, unambiguously, and expressly prohibited by the Order. We disagree.

To be found in civil contempt, the record must show: (1) an individual had an obligation to perform or refrain from some action under a court order, and (2) the individual failed to meet that obligation. Id. The judgment, order, or decree supporting a contempt charge "must precisely advise the individual of what conduct is forbidden," meaning that the directive "must be so definite and specific as to leave no reasonable basis for doubt of its meaning" and it may not be expanded by implication in a contempt proceeding. Id. at 328–29 (internal quotations and citation omitted). Therefore, in reviewing a trial court's judgment of contempt, we are guided by the express dictates of the court order which the contemnor is alleged to have disobeyed. The general rules of construction apply and thus "[w]ords and clauses used in the order, judgment or decree must be construed in accordance with their natural import." Carter Cty. R-1 Sch. Dist. v. Palmer , 627 S.W.2d 664, 665 (Mo. App. S.D. 1982).

i. No reasonable basis exists to doubt that the Order's directive prohibited Mauzy's complained-of conduct

Mauzy does not challenge the trial court's findings regarding his complained-of conduct—namely, that he was in contact with employees of the prohibited company customers during the twelve-month period specified in the Order—and only challenges the conclusion that such conduct violated a clear and unambiguous directive of the Order. Mauzy advances two arguments for why his conduct was not clearly prohibited and why he cannot therefore be found in contempt. First, Mauzy contends the Order only specifically prohibited him from contacting the listed companies and not their individual employees. Second, Mauzy contends the nature of this contact was wholly personal—not sales- or business-related—and that the Order did not prohibit maintaining personal relationships with individual employees of the listed companies. We disagree and address each argument in turn.

a. The prohibition on contacting company customers includes the individual company employees at issue here

We first address Mauzy's argument that he cannot be found in contempt because the Order only prohibited him from contacting the listed company customers , which does not encompass individual employees of those companies. In support of this construction, Mauzy argues that a business entity is separate and distinct from its employees and that, because the Order only lists the company names, Mauzy was only prohibited from, "for example, sending a solicitous or introductory letter, fax, or email to the Companies’ attention, appearing at their physical offices, or calling their general phone line."² We disagree.

Under the circumstances here, the prohibition on contacting the company customers encompasses the employee contact points with whom Mauzy closely worked. This understanding is supported by substantial evidence in the record. Indeed, both at the injunction hearing and the contempt hearing, the parties and their attorneys interchangeably utilized terms such as the names of the companies, "customers," "accounts," and the individual points of contact to refer to the same conceptual customer entities. For example:

• Mauzy's statements equated the company customers and the individual employee contacts, such as: "I contacted most of the customers that I had become close with ..." followed by "I had known those guys for quite some time, became friends with them ..."; and answering the question "[o]ther than Matt Frey at Benchmark Foam, what other customers listed in [the Order] have you contacted?" with "I have contacted or I've been in contact with on occasion Seth Albers from Albers Spray Solutions, and some of the employees at BP Surface Solutions."

• Chemline's founder and CEO equated Benchmark Foam with Frey by stating "[Mauzy's] been in contact with Benchmark, who has no problem letting us know that he talks to Tim [Mauzy] almost weekly," specifically stating that the "he" referred to was Frey.

• Mauzy's counsel equated the company customer accounts and the individual employee contacts, asking Mauzy: "So earlier you testified that you contacted a number of other customers or accounts. Were you contacting these individuals in their capacity as individuals because you considered them friends?"; and "you have not solicited any business from those five companies since March 11? ... Indirectly solicit[ed] anything, tried to hint to those people that you wanted them to buy from you?"

In addition, this reading of the Order is reasonable and expected given the protectable interest at issue. "Customer contacts are a protectable commodity because goodwill develops between the customers and the employer through its employees whose job it is to meet and converse with the customer while representing the employer." Systematic Bus. Servs., Inc. v. Bratten , 162 S.W.3d 41, 51 (Mo. App. W.D. 2005).

[T]he rationale for protecting ‘customer contacts’ is that, in the sales industry, a customer's goodwill

...