Kneebinding, Inc. v. Howell

Decision Date06 November 2020
Docket NumberNo. 19-368,19-368
Citation251 A.3d 13
Parties KNEEBINDING, INC. v. Richard HOWELL
CourtVermont Supreme Court

Peter G. Anderson of Anderson & Associates, Stowe, for Plaintiff-Appellee.

Richard J. Howell, Pro Se, Stowe, Defendant-Appellant.

PRESENT: Reiber, C.J., Robinson, Eaton, Carroll and Cohen, JJ.

CARROLL, J.

¶ 1. This appeal is the third time the dispute between Richard Howell and KneeBinding, Inc., has reached this Court. In Kneebinding, Inc. v. Howell (KneeBinding II), 2018 VT 101, ¶ 150, 208 Vt. 578, 201 A.3d 326, we in large part affirmed an August 2016 trial court decision, but reversed its decision to terminate a March 30, 2009 permanent injunction and remanded the court's award of attorney's fees to KneeBinding with directions to consider additional evidence of legal fees. On remand in August 2019, the trial court (1) awarded additional attorney's fees to KneeBinding; (2) issued a sanction for a May 23, 2018 finding that Howell violated an August 10, 2017 injunction that was in place while KneeBinding II was pending; and (3) found Howell in contempt for violating the March 2009 permanent injunction that this Court restored in KneeBinding II. On appeal, Howell challenges the May 23, 2018, finding that he violated the August 2017 injunction and the August 2019 finding that he violated the March 2009 permanent injunction. We affirm.

I. Factual and Procedural Background

¶ 2. In 2003, Richard Howell invented a binding that has a "special, patented heel release designed to mitigate knee injuries ... that are common in downhill skiing." Id. ¶¶ 2-3. Around the same time, Howell founded a company with the name KneeBinding that was incorporated in Delaware and had its principal place of business in Stowe, Vermont. In November 2007, Howell formed a business relationship with John Springer-Miller, and the two signed transaction documents, which included an employment agreement, a stock-purchase agreement, an investor-rights agreement, and an amended certificate of incorporation. These transaction documents created the following corporate structure. Springer-Miller was the majority shareholder and Howell was a minority shareholder. Howell would serve as president, chief executive officer, secretary, and treasurer. His employment, however, was at-will. Id. Springer-Miller would serve as the company's chief financial officer and have control over the company funds.

¶ 3. Howell and Springer-Miller's working relationship "began to deteriorate almost immediately," and the KneeBinding board voted to terminate Howell as president in September 2008. Id. ¶¶ 10, 13. In December, Howell signed a severance agreement and eventually resigned from the board. The severance agreement contained a nondisparagement clause, a confidentiality clause, and a release. The release provided the following:

In consideration of the agreements and promises described in Paragraph 2(b), which you acknowledge you would not otherwise be entitled to receive, you hereby fully, forever, irrevocably and unconditionally release, remise, and discharge the Company, its officers, directors, attorneys, affiliates, investors, agents and employees (each in their individual and corporate capacities) ... from any and all claims ... of every kind and nature that you ever had or now have against the Released Parties, including, but not limited to, any and all claims arising out of or relating to your employment with and/or separation from the Company ....

The end of the severance agreement explained that the severance agreement "constitutes the entire understanding and agreement between the parties hereto with respect to your severance benefits and the settlement of claims against the Company and cancels all previous oral and written negotiations, agreements, commitments and writings in connection therewith."

¶ 4. In March 2009, KneeBinding filed a motion for an ex parte temporary restraining order (TRO) alleging that Howell had violated the confidentiality and nondisparagement portions of the severance agreement. The trial court granted the motion and issued a TRO ordering Howell "not to publish oral or written statements relating to KneeBinding to any ‘current or potential customer, client, investor, and vendor.’ " KneeBinding II, 2018 VT 101, ¶ 14, 208 Vt. 578, 201 A.3d 326. KneeBinding subsequently filed a motion for contempt because Howell responded to the TRO by picketing in front of the courthouse with a sign alleging that " ‘KneeBinding was 100% defective.’ " Id.

¶ 5. On March 30, 2009, the parties reached two agreements that the trial court signed into orders: a stipulation for a permanent injunction and a stipulation regarding contempt. The permanent injunction provided, among other things, the following:

(1) [Howell] shall not publish or cause to be published any communication, oral or written, that relates to KneeBinding, its products, or John or Tina Springer-Miller or any of its other principals to any current or potential customer, client, investor or vendor.
(2) [Howell] shall not publish or caused to be published any communication, oral or written, that has a reasonable likelihood to create confusion as to whether he speaks or acts on behalf of KneeBinding, its products, or John or Tina Springer-Miller or any of its other principals.

Id. ¶ 16 (alteration in original). The contempt stipulation provided that Howell had violated the TRO, set an appropriate fine of $7000, and relieved Howell's obligation to pay the fine if he did not violate the permanent injunction prior to September 15, 2009.

¶ 6. That same month, KneeBinding filed suit against Howell, alleging: (1) trademark infringement, (2) violations of the nondisparagement and noncompete provisions of the severance agreement, (3) tortious interference with contract, (4) defamation, and (5) misappropriation of trade secrets. Howell counterclaimed, alleging: (1) defamation, (2) breach of contract, (3) invasion of privacy, (4) misappropriation, (5) unfair competition, (6) patent violations, (7) tortious interference with business relations, and (8) intentional infliction of emotional distress. While the case was proceeding at the trial court, KneeBinding moved for sanctions in 2010, and again in 2012, alleging that Howell had violated the permanent injunction.

¶ 7. In 2012, the trial court granted partial summary judgment to KneeBinding, ruling that Howell's claims were barred by the release in the severance agreement, with the exception of his claims for misappropriation of his name and skills, defamation, and intentional infliction of emotional distress. This ruling was affirmed on interlocutory appeal. Following KneeBinding I, the trial court conducted a twenty-day trial and issued a lengthy decision in August 2016 ruling against Howell on his remaining claims. As to KneeBinding's claims, the court ruled that Howell had defamed the company and violated the permanent injunction. The court directed the parties to submit further briefing on sanctions for violating the injunction and the appropriate damages for defamation.

¶ 8. From January to April 2017, the trial court issued a series of interlocutory decisions on these remaining issues. As relevant to this appeal, these decisions included: (1) declining to impose the $7000 stipulated fine for violating the permanent injunction; (2) vacating the permanent injunction, reasoning that keeping the injunction in effect post-trial posed First Amendment concerns; and (3) awarding KneeBinding $22,433 in attorney's fees incurred litigating the contempt claims. KneeBinding appealed.

¶ 9. While the appeal in KneeBinding II was pending, KneeBinding moved, pursuant to Vermont Rule of Civil Procedure 62(d)(2), to restore the permanent injunction pending appeal. On August 10, 2017, the trial court instated a modified injunction, which provided:

[W]hile an appeal by a party to this litigation is pending in the Vermont Supreme Court,
1. Richard J. Howell shall not publish or cause to be published any false, disparaging, or derogatory communication, oral or written, regarding KneeBinding, Inc., its products, John or Tina Springer-Miller, or any other KneeBinding principal, to any media outlet, industry group, current or potential customer, client, investor, or vendor.

¶ 10. Between February and March 2018, while KneeBinding II was still pending, Howell sent three emails to Progressive Plastics—one of Kneebinding's vendors—alleging that Progressive was infringing on his patents and directing Progressive, under the threat of litigation, to cease production and pay him damages. Based on these emails, KneeBinding filed another motion for contempt in the trial court arguing that Howell violated the August 2017 injunction. On May 23, 2018, Judge Bryan1 found Howell in contempt for sending three emails to Progressive Plastics "making false statements that he owned the KneeBinding patents and that Progressive was infringing them"; however, Judge Bryan declined to impose a fine while there was an appeal pending in this Court.

¶ 11. In October 2018, this Court issued KneeBinding II, which in large part affirmed the trial court's August 2016 and subsequent interlocutory decisions. 2018 VT 101, ¶ 150, 208 Vt. 578, 201 A.3d 326. However, we reversed the trial court's decision to vacate the permanent injunction, explaining that the permanent injunction did not pose First Amendment concerns "[b]ecause the record evidence demonstrate[d] that the stipulation providing for the injunction was voluntarily agreed to after day-long negotiations—with counsel representing both parties—and it clearly identifie[d] the free speech rights that Howell" relinquished. KneeBinding II, 2018 VT 101, ¶ 63, 208 Vt. 578, 201 A.3d 326. In addition, we reversed and remanded the court's award of attorney's fees to KneeBinding for litigating the contempt claims because the court ignored evidence regarding the "significant legal fees" incurred in filing the second motion...

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1 cases
  • Peachey v. Peachey
    • United States
    • Vermont Supreme Court
    • October 8, 2021
    ...a hearing, concerning those same allegations-the argument is inadequately briefed. See Kneebinding, Inc. v. Howell, 2020 VT 99, ¶ 61, Vt., 251 A.3d 13 (providing that under V.R.A.P. 28(a)(4), Court need consider inadequately briefed arguments). --------- ...

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