Lewis v. Nical of Palm Beach, Inc.

• Decision Date: 11 April 2007
• Docket Number: No. 4D05-1841.,No. 4D05-1987.,No. 4D05-2835.,4D05-1841.,4D05-1987.,4D05-2835.
• Citation: 959 So.2d 745
• Parties: Scott LEWIS, Carol Lewis and Scott Lewis Gardening & Trimming, Inc., a Florida corporation, Appellants, v. NICAL OF PALM BEACH, INC., a Delaware corporation, Amy Habie, Patrick Bilton and Boies, Schiller & Flexner, LLP, Appellees.
• Court: Florida District Court of Appeals

959 So.2d 745

Scott LEWIS, Carol Lewis and Scott Lewis Gardening & Trimming, Inc., a Florida corporation, Appellants, v. NICAL OF PALM BEACH, INC., a Delaware corporation, Amy Habie, Patrick Bilton and Boies, Schiller & Flexner, LLP, Appellees.

No. 4D05-1841.

No. 4D05-1987.

No. 4D05-2835.

District Court of Appeal of Florida, Fourth District.

April 11, 2007.

Order Denying Rehearing, Rehearing En Banc, Clarification and Certification August 1, 2007.

Scott Lewis and Carol Lewis, West Palm Beach, pro se.

Jack Scarola of Searcy, Denny, Scarola, Barnhart & Shipley, P.A., West Palm Beach, for appellant Scott Lewis Gardening & Trimming, Inc., and as Special Prosecutor.

Elliot H. Scherker, Alan T. Dimond and Daniel M. Samson of Greenberg Traurig, P.A., Miami, for appellees Nical of Palm Beach, Inc., and Amy Habie.

Bruce S. Rogow of Bruce S. Rogow, P.A., Fort Lauderdale, for appellees Nical of Palm Beach, Inc., and Patrick Bilton.

Jay M. Levy of Jay M. Levy, P.A., Miami, for appellee Boies, Schiller & Flexner, LLP.

STEVENSON, C.J.

These are consolidated appeals from three orders of the trial court on motions for contempt filed by Scott and Carol Lewis and Scott Lewis Gardening & Trimming, Inc. ("SLG & T"), seeking to hold Nical of Palm Beach, Inc. ("Nical"), Amy Habie, and Patrick Bilton in contempt of court. In the first of these orders, the trial court found Nical and Bilton guilty of indirect criminal contempt and, in the second order, pronounced sentence. The trial court imposed a fine upon Nical and sentenced Bilton to a term of incarceration, a portion of which is suspended upon his payment of a fine and his not further violating any orders of the court. As an additional sanction, the trial court disqualified the law firm that had been representing Nical, Habie, and Bilton. In the third order, the trial court denied a further motion to hold Nical, Habie, and Bilton in civil contempt. Scott and Carol Lewis and SLG & T (collectively referred to as "the Lewis parties") have appealed from all three orders; Nical, Habie, and Bilton (collectively referred to as "the Nical parties") have appealed from the order of indirect criminal contempt and the resulting sentence.

As a consequence of the discussion which follows: (1) we affirm the trial court's order to the extent that it holds Nical and Patrick Bilton in indirect criminal contempt as a consequence of Bilton's conversation with White; (2) we affirm the sentence imposed upon Bilton and the fine imposed upon Nical as a consequence of Bilton's conversation with White; (3) we reverse that portion of the order holding Nical in indirect criminal contempt as a consequence of the issuance of the subpoena to White and reverse the resulting fine imposed against Nical; (4) we reverse that portion of the criminal contempt sentencing order disqualifying the Nical parties' counsel and remand without prejudice for the trial court to once again impose such a sanction after affording Attorney Rash and the law firm notice and the opportunity to be heard on the issue; (5) we affirm the trial court's ruling that the evidence failed to support the imposition of a compensatory civil contempt sanction for any of the violations, but reverse the court's holding that a coercive civil contempt sanction was not available as a remedy; and (6) since these additional sanctions are, in fact, imposable, on remand, the trial court may reconsider the entire penalty scheme consistent with this decision.

The Initial Litigation & the Settlement

About ten years ago, Amy Habie purchased a landscape business, Scott Lewis Gardening & Trimming, Inc., from its principal, Scott Lewis. Habie operated her newly-purchased landscape business under the name Nical of Palm Beach, Inc. Amy Habie owns 50% of Nical, Patrick Bilton 25%, and the Boies family trust the remaining 25%. The purchase agreement contemplated that Lewis would work for Habie. Disputes soon arose, and Lewis resumed his business under the name Scott Lewis Gardening & Trimming, Inc. Litigation between Nical, Scott and Carol Lewis, and SLG & T ensued. This litigation was resolved through a 1998 settlement agreement. The agreement provided in part that (1) Nical would transfer all right to the name "Scott Lewis Gardening & Trimming, Inc." to Lewis; (2) Nical would discontinue the use of any business name that includes "Scott Lewis" and discontinue such listings in telephone and other directories; and (3) the parties would refrain from contacting, communicating with, or soliciting one another's customers. The settlement was adopted by the trial court in a final judgment entered February 19, 1999.

Subsequent Violations of the Settlement Agreement & the Contempt Proceedings that Resulted in the Orders Appealed

The truce was short lived. In the years which followed, Habie and Nical were found in contempt on numerous occasions for violating court orders related to the settlement agreement, particularly involving the use of similar business names, misleading telephone and internet directory listings, contact with Lewis's clients, and the like. Some of the subsequent contempt violations, but not all, are discussed in Nical of Palm Beach, Inc. v. Lewis, 815 So.2d 647 (Fla. 4th DCA 2002). In regard to the instant appeal, Lewis filed a contempt motion on September 30, 2004, alleging that Nical, Habie, and Bilton had violated the settlement agreement and the court's orders by contacting one of Lewis's clients, the Town of Palm Beach, via a conversation between Bilton and Steve White, a town official. On December 7, 2004, the Lewis parties filed another motion, alleging Habie and Nical violated a court order when their counsel, Boies, Schiller & Flexner, issued a subpoena to White in violation of a July 6, 2000 order requiring court approval before the issuance of a subpoena to any individual on either party's client list.

An evidentiary hearing was held on the contempt motion and, on March 21, 2005, Judge Gerber entered an order finding Nical and Bilton guilty of indirect criminal contempt as a consequence of Bilton's conversation with White and finding Nical guilty of indirect criminal contempt as a consequence of the issuance of the subpoena. Habie was found not guilty of indirect criminal contempt concerning Bilton's conversation with White and no specific findings were made regarding Habie and the contempt charge stemming from the subpoena. The trial judge found the violations had to be characterized as criminal contempt because there was no purgeable, coercive sanction that could be imposed and a compensatory fine could not be imposed as Lewis had failed to demonstrate actual loss. As a sentence for the criminal contempt, in an order dated April 29, 2005, the trial court disqualified Boies, Schiller & Flexner from further representing Nical, Bilton, Habie, or any other Nical employee; imposed against Nical two $500 fines; and sentenced Bilton to 90 days incarceration with 60 days of that sentence suspended on the condition that Bilton pay a $500 fine and not further violate any court orders. The contempt and sentencing orders were timely appealed by both Lewis and Nical.

On June 2, 2005, Lewis filed a sworn motion for an order to show cause as to why Nical, Habie, and Bilton should not be held in civil contempt, alleging that Bilton was communicating with Veronica Butler, a Lewis client, and doing more than $100,000 of work at the Eigelberger estate at the direction of Butler. In an order dated June 15, 2005, the trial court denied the motion. Among other things, the trial judge found that a compensatory fine was not appropriate because the allegations regarding financial damages were "conclusory" and that a coercive sanction was not appropriate because the motion failed to allege what act Nical, Habie, and/or Bilton had not performed "which a contempt order c[ould] coerce them into performing in the future." The Lewis parties appealed. Although the motion was denied "without prejudice," we find from the context of the case that the court's decision that it had no authority to order a coercive sanction was a definitive and final ruling.

The Nical Parties' Challenge to being held in Indirect Criminal Contempt & to the resulting Sentences

A. Patrick Bilton

The Nical parties first allege that the order holding Bilton in indirect criminal contempt is improper because Bilton was not specifically named in the February 1999 order. The order prohibits "Nical of Palm Beach, Inc." from contacting, communicating with, interfering with, or soliciting the Lewis parties' clients. Thus, as Bilton asserts, he is not specifically named in the injunctive order. This does not mean, though, that the order cannot be enforced against him or that he cannot be held in contempt for violating the order. Florida Rule of Civil Procedure 1.610(c) specifically provides that "[e]very injunction . . . shall be binding on the parties to the action, their officers, agents, servants, employees, and attorneys and on those persons in active concert or participation with them who receive actual notice of the injunction." See also Ex parte Lennon, 166 U.S. 548, 17 S.Ct. 658, 41 L.Ed. 1110 (1897) (upholding finding of contempt against employee in case where injunction was entered against employer and employee was aware of injunction); United States v. Paccione, 964 F.2d 1269, 1274 (2d Cir. 1992) (citing Federal Rule of Civil Procedure 65(d) and recognizing that "[o]rdinarily, the class of parties subject to an injunction or restraining order include the named parties, officers, agents, servants, employees, attorneys of the named parties and successors in interest to the property that is subject to the injunction or restraining order"); Neshaminy Water Res. Auth. v. Del-Aware Unlimited, Inc., 332 Pa.Super. 461, 481 A.2d 879, 884 (1984) (stating "where an injunction has issued against a corporation, it may be enforced against officers, agents, representatives, and employees...