Wanke, Indus., Commercial, Residential, Inc. v. Superior Court of San Diego Cnty.
| Decision Date | 29 October 2012 |
| Docket Number | D058669.,Nos. D058825,s. D058825 |
| Citation | 147 Cal.Rptr.3d 651,209 Cal.App.4th 1151 |
| Parties | WANKE, INDUSTRIAL, COMMERCIAL, RESIDENTIAL, INC., Petitioner, v. The SUPERIOR COURT of San Diego County, Respondent; Scott Keck, et al., Real Parties in Interest. Wanke, Industrial, Commercial, Residential, Inc., Plaintiff and Appellant, v. Scott Keck, et al., Defendants and Appellants. |
| Court | California Court of Appeals Court of Appeals |
OPINION TEXT STARTS HERE
See 1 Witkin & Epstein, Cal. Criminal Law (4th ed. 2012) Defenses, § 132 et seq.
Lindborg & Mazor, Peter F. Lindborg, Glendale, Irina J. Mazor and Patricia I. Forman, Los Angeles, for Petitioner, Plaintiff and Appellant.
Page, Lobo, Costales & Preston, Jonathan Preston, San Diego; Boudreau, Williams, Jon R. Williams for Real Parties in Interest, Defendants and Appellants.
This case requires this court to answer two fundamental questions. First, may a party obtain appellate review of an order acquitting a defendant in a nonsummary criminal contempt proceeding? We conclude that the double jeopardy clause of the Fifth Amendment to the federal constitution precludes such review. Second, may a party successfully defend against an alleged violation of a facially valid stipulated injunction that the trial court had jurisdiction to issue, on the ground that the injunction is invalid? We conclude that the answer to this question is “no.”
Applying these conclusions in the present case, we deny Wanke, Industrial, Commercial, Residential, Inc.'s (Wanke) writ petition seeking review of an order acquitting Scott Keck and his company, WP Solutions, Inc. (WP Solutions), of contempt for violating a stipulated injunction enjoining Keck and WP Solutions from soliciting certain Wanke customers. However, with respect to Wanke's related appeal from its motion to enforce a settlement agreement that incorporated the stipulated injunction, we conclude that the trial court erred in finding that the stipulated injunction is invalid and refusing to enforce the injunction on that basis.1
Wanke is a company that installs waterproofing systems in southern California. Scott Keck and Jacob Bozarth are former employees of Wanke. 2 While employed by Wanke, Keck and Bozarth signed certain confidentiality agreements as conditions of their employment. In early 2008, Keck and Bozarth left Wanke's employ and formed their own competing waterproofing company, WP Solutions.
In December 2008, Wanke filed the underlying action in this matter against Keck and Bozarth. Wanke's complaint alleged that it had “spent a significant amount of time, effort, and money in the acquisition, development, compilation and maintenance of confidential information concerning its customers, business, and products,” including the “identity of [Wanke's] existing and prospective customers, the objectives of each customer, the strategies developed for each customer, the identities of key personnel at those customers, the special needs and characteristics of [Wanke's] existing and potential customers, [and] the histories and account balances of existing customers ... collectively ... ‘Confidential Information’....” Wanke further alleged that Keck and Bozarth had “misus[ed] and misappropriat[ed] ... [Wanke's] trade secrets ... including ... some or all of the Confidential Information.”Wanke also alleged that Keck and Bozarth had “actively targeted and recruited customers of [Wanke] utilizing the confidential business information of [Wanke]....” Wanke's complaint contained eight causes of action, including a claim for misappropriation of trade secrets. In its prayer for relief, Wanke requested that the court issue “an order enjoining [Keck and Bozarth] from soliciting [Wanke's] past or current customers,” in addition to seeking other forms of relief.
Keck and Bozarth filed a cross-complaint against Wanke for unpaid compensation.
In October 2009, the parties resolved the action by entering into a settlement and mutual general release agreement (Settlement Agreement).3 Among the terms of the Settlement Agreement were that Keck, Bozarth, and WP Solutions would pay Wanke $38,000. In addition, the parties agreed to release each other from any existing or future claims. Keck, Bozarth, and WP Solutions also agreed to a stipulated injunction described in the following paragraph (Stipulated Injunction). The Settlement Agreement provided that the trial court would retain jurisdiction over the parties pursuant to Code of Civil Procedure section 664.6, to enforce the terms of the Settlement Agreement and the Stipulated Injunction.
On October 30, 2009, the trial court entered the Stipulated Injunction. 4 The Stipulated Injunction, which the parties agreed would remain in force for five years from the date of entry of the order, prohibited Keck, Bozarth and WP Solutions from:
“Contacting or soliciting any person, entity, project owner, or representative on the customer list of [Wanke] attached hereto as Exhibit ‘1’ (‘[Wanke's] Customers') 5 for the purpose of gaining any of their business, provided that, after a period of eighteen (18) months from the date of entry of this order that defendants will not be deemed to have contacted or solicited a person or entity included within the definition of [Wanke's] Customers if such person or entity initiates the contact with defendants which leads to defendants submitting a bid or proposal to such person or entity.”
The Stipulated Injunction also contains various other restrictions related to this provision, including prohibitions on “[s]eeking to redirect and/or redirecting business from [Wanke's] Customers to Defendants,” and “[s]upplying labor, equipment, materials or services to any of [Wanke's] Customers.” The Stipulated Injunction provides for liquidated damages in the amount of $50,000 “for the initial violation of any provision of this order, with the amount of such liquidated damages increasing in increments of [$10,000] for each subsequent violation of any provision of this order, plus [Wanke's] actual attorneys' fees, costs and expenses....”
C. Proceedings to enforce the Stipulated Injunction1. The Con Am Management proceedings
In May 2010, Wanke filed an application for an order to show cause (OSC) requesting that the trial court hold Keck, Bozarth, and WP Solutions (defendants) in contempt for having violated the Stipulated Injunction. In its application, Wanke alleged that defendants had violated the terms of the Stipulated Injunction on 11 separate occasions by, among other things, contacting and/or supplying labor and/or materials to Con Am Management, one of Wanke's customers that appeared on the “Customer & Job List” attached to the Stipulated Injunction.
In June 2010, Wanke filed a motion to enforce the Settlement Agreement pursuant to Code of Civil Procedure section 664.4. In its motion and accompanying brief, Wanke referred to defendants' alleged violations of the Stipulated Injunction related to Con Am Management, and requested that the court order defendants to pay liquidated damages as provided in the Stipulated Injunction.
On August 9, the trial court held a combined trial on Wanke's OSC for contempt and hearing on Wanke's motion to enforce the Settlement Agreement. At that proceeding, Wanke presented evidence that Keck and WP Solutions had repeatedly contacted Con Am Management and had supplied labor to the company, in violation of the Stipulated Injunction.
On August 11, the trial court issued a statement of decision. With respect to all 11 counts, the trial court determined that Wanke had established three of the four elements necessary to prove that defendants were in contempt of the Stipulated Injunction. Specifically, the trial court determined that defendants had knowledge of the Stipulated Injunction, that they had the ability to comply with its terms, and that they had willfully disobeyed it. 7 However, the court concluded that Wanke had failed to establish the “existence of a lawful order,” which is required before a party may be held in contempt of that order.
The trial court reached this conclusion based on its determination that the Stipulated Injunction was invalid to the extent that it prohibited defendants from soliciting an entity merely because the entity appeared on the customer list attached to the Stipulated Injunction. In making this determination, the court began by reviewing California law pertaining to the enforceabilityof noncompetition agreements, including Business and Professions Code section 16600.8 The court summarized this law by noting, “[C]ourts have repeatedly held a former employee may be barred from soliciting existing customers to redirect their business away from the former employer and to the employee's new business if the employee is utilizing trade secret information to solicit those customers.” The trial court also recognized that, “Numerous courts have concluded [that] customer lists can qualify for trade secret protection.” However, the trial court determined that the Stipulated Injunction was invalid under Business and Professions Code section 16600 because neither the identity of Con Am Management nor its location was a trade secret. The court reasoned as follows:
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