Opinion
No. 60561-5-I.
May 5, 2008.
Appeal from a judgment of the Superior Court for King County, No. 06-2-33271-7, Richard A. Jones, J., entered August 14, 2007.
Affirmed by unpublished opinion per Lau, J., concurred in by Dwyer, A.C.J., and Cox, J.
The Brass Key, Inc., appeals an order denying its motion for contempt against its former employee Martin Crowley and Crowley's former employer, Toy Investments, Inc. (dba "Toysmith"). After it learned that Crowley had accepted a job with Toysmith's product supplier, Ability International, Brass Key filed a contempt motion alleging that Crowley and Toysmith had intentionally disobeyed the court's order barring Crowley's employment with Toysmith or any other business competitor. Because the court must strictly construe the order sought to be enforced by contempt proceedings, it did not abuse its discretion by denying Brass Key's motion for contempt.
Accordingly, we affirm.
FACTS
Brass Key is in the toy and collectibles business. Its focus is on porcelain dolls, but its products also include vinyl dolls, glass ornaments, and seasonal dcor for the home and garden. Brass Key's products are sold to retail companies like Costco, Sears, Kmart, Wal-Mart, and Target.
Brass Key hired Crowley as a director of product development. Crowley signed an employment contract that contained a noncompete agreement. He was not involved in the doll side of Brass Key's business, which comprised the majority of its operation; however, he did help develop other items, including children's gardening kits. Crowley helped Brass Key pitch a children's gardening product to Costco for the Spring 2006 sales period. Instead, Costco selected a "Deluxe Gardening Kit" offered by Toysmith.
William Smith founded Toysmith in 1981. Toysmith sells toys, gifts and games, including garden related products, scientific toys, flying foam toys, bubble related toys, and some sporting goods. Much of its product line consists of items with a retail value of approximately one dollar. Toysmith sells its products to specialty toy stores, zoos, gas stations, grocery stores, hardware stores, sporting goods stores, dollar stores, bike shops, souvenir shops, and other retailers. More than 95 percent of Toysmith's products are manufactured and purchased in Hong Kong and Taiwan.
During the summer of 2006, Crowley began looking for a new employer. Toysmith was among the prospective employers he contacted. Smith invited Crowley to interview, and during the interview, Smith and Crowley discussed the noncompete agreement. However, based on differences between the types of products offered by Toysmith and Brass Key and the manner in which those products were marketed, they concluded that the two companies were not competitors. Crowley accepted employment with Toysmith and resigned from his position at Brass Key in August 2006.
Brass Key subsequently filed a lawsuit seeking to enforce the noncompete agreement. At a hearing on its request for injunctive relief, Brass Key argued that Crowley could disrupt its customer relationships. Crowley argued that Brass Key and Toysmith were not competitors because they sold different products to different markets, with only a small degree of overlap. The trial court entered a preliminary injunction barring Crowley from working for Toysmith, "or any other competitor of plaintiff for one year, until August 18, 2007." The court later entered an identical permanent injunction.
We refer to the orders granting preliminary and permanent injunctions as "the order."
Crowley's employment with Toysmith was terminated in accordance with the court order. Crowley contacted Smith for advice about finding a new job. Smith recommended that he apply to Ability International Enterprise Ltd. ("Ability"), a Hong Kong based toy supply company. Ability supplies Toysmith with goods purchased from Asian factories, but Toysmith has no ownership interest in Ability. Ability does not sell directly to retail outlets.
Crowley began working for Ability as a contractor in February 2007. Crowley's responsibilities included working with Toysmith employees to increase Ability's volume of sales with Toysmith. In particular, he helped position Ability to become Toysmith's sole source for its foam toy product line. Crowley performed this work both at a home office and at Toysmith's offices. On June 7, 2007, Brass Key employees observed Crowley's car in the Toysmith parking lot. Brass Key's attorney hired a private investigator to follow Crowley's movements. On July 10, 2007, Brass Key filed a contempt motion, alleging that Crowley and Toysmith intentionally disobeyed the order.
Crowley and Toysmith responded that they had not violated the order. They argued that Crowley worked for Ability, not Toysmith, and that the order did not prohibit him from working for other companies simply because they did business with Toysmith. Additionally, Toysmith contended that Crowley's work for Ability was substantially different from his work for Toysmith and that there was no evidence that his work for Ability was competitive towards Brass Key. Toysmith also argued that it was in an adversarial relationship with Ability, whose goal was to charge its customers the highest possible price for their orders.
Brass Key submitted a reply brief after deposing Crowley and Smith. It argued that Crowley violated the order even if he was no longer in a "formal" employee-employer relationship with Toysmith because he was still working for Toysmith, even if he was doing so indirectly. The court considered these arguments and the documentary record and found that Crowley and Toysmith were not in contempt of the order. Brass Key appealed.
Brass Key's reply brief exceeded the page limit for reply briefs. While the trial judge denied Brass Key's request for permission to file an over-length brief, his ultimate order stated that he did in fact consider the reply brief. Therefore, we will consider it in our review.
ANALYSIS
Standard of Review
Brass Key assigns error to the trial court's denial of its motion for contempt. Whether contempt is warranted in a particular case is within the discretion of the trial court and unless that discretion is abused, it will not be disturbed on appeal. Trummel v. Mitchell, 156 Wn.2d 653, 672, 131 P.3d 305 (2006); see also State v. Noah, 103 Wn. App. 29, 45, 9 P.3d 858 (2000) ("Contempt orders are within the discretion of the judge so ruling."); King v. Dep't of Social Health Servs., 110 Wn.2d 793, 798, 756 P.2d 1303 (1988) ("Whether contempt is warranted . . . is a matter within the sound discretion of the trial court"); In re Marriage of Thompson, 97 Wn. App. 873, 877, 988 P.2d 499 (1999) (contempt order reviewed for abuse of discretion) (citing State v. Caffrey, 70 Wn.2d 120, 122, 422 P.2d 307 (1966)) (same). Abuse of discretion occurs only if the exercise of discretion is manifestly unreasonable, based on untenable grounds, or based on untenable reasons. Moreman v. Butcher, 126 Wn.2d 36, 40, 891 P.2d 725 (1995).
Brass Key argues that the standard of review is de novo because the trial court's order was based on documentary evidence rather than live testimony. However, the cases it cites in support of this theory are inapposite. Danielson v. City of Seattle, 45 Wn. App. 235, 240, 724 P.2d 1115 (1986), aff'd, 108 Wn.2d 788, 742 P.2d 717 (1987), involved review of a police officer's discharge when an administrative agency had conducted all of the evidentiary hearings. In reviewing the agency's decision, the superior court made factual findings based on documentary evidence. Id. The court held in that context, it was not bound by the superior court's factual findings. Id. In re Estate of Riley, 78 Wn.2d 623, 65-57, 479 P.2d 1 (1970) involved a will contest where the trial court erred in failing to consider the deposition testimony of two witnesses. The court held that in that context, it could determine from the deposition what factual findings should have been drawn from the depositions. Id. at 654. In Jenkins v. Snohomish County Pub. Util. Dist. 1, 105 Wn.2d 99, 103, 713 P.2d 79 (1986), the court held that a child was incompetent, so his deposition had been erroneously admitted. The court independently reviewed the underlying facts to make this determination. Id. In Wilson v. Howard, 5 Wn. App. 169, 176, 486 P.2d 1172 (1971), the court held that it could independently review plat maps and other written instruments to determine whether they supported the trial court's factual findings. None of these cases involved contempt.
The only case Brass Key cites involving review of a contempt order undermines its de novo argument. In re Marriage of Rideout, 150 Wn.2d 337, 340, 77 P.3d 1174 (2003) involved review of a contempt order issued pursuant to a specific domestic relations statute. RCW 26.09.160. In reviewing the order, the court specifically rejected the argument that it should be reviewed de novo because it was based solely on written submissions, including declarations and affidavits. Rideout, 150 Wn.2d at 350-52. The court stated that trial courts are in a better position to weigh competing documentary evidence and resolve conflicts when credibility is at issue even when the record is entirely documentary. Id. at 350-51. Brass Key cites no case in which a contempt order was reviewed de novo.
Under RCW 26.09.160(2)(b), a finding of contempt is mandatory if a parent has acted in bad faith in failing to comply with a parenting plan's residential provisions; thus, the general rule that contempt orders are reviewed for abuse of discretion does not apply in this context. See In re Marriage of Rideout, 110 Wn. App. 370, 376, 40 P.3d 1192 (2002), aff'd, 150 Wn.2d 337, 77 P.3d 1174 (2003) ("Other than sending a parent to jail, punishment for contempt in this context is mandatory, not discretionary."). Because the facts on which the order was based were contested, the court applied the substantial evidence standard. Rideout, 150 Wn.2d at 353.
In Trummel v. Mitchell, 156 Wn.2d at 672, the court recently reiterated that contempt orders are reviewed for abuse of discretion. Stephen Mitchell, administrator of a low income housing complex, accused Paul Trummel of violating an antiharassment order by posting false stories on the Internet about residents of the complex. Id. at 659. The trial court found Trummel in contempt for violating the order's bar on surveillance. Id. at 660. On appeal, the court stated, "Whether contempt is warranted in a particular case is a matter within the sound discretion of the trial court; unless that discretion is abused, it should not be disturbed on appeal." Id. at 671-72. The court went on to hold that the trial court had abused its discretion by expanding the definition of surveillance to include violating "the spirit" of the order and making the housing complex residents feel unsafe. Id. at 674.
Like Trummel, this case involves review of a trial court's decision on a motion for contempt for violating a prior court order. Here, the trial court found that Crowley and Toysmith were not in contempt and it denied the motion. We review this decision applying the abuse of discretion standard.
Contempt
Contempt is defined to include "intentional . . . [d]isobedience of any lawful . . . order . . . of the court." RCW 7.21.010(1)(b). When deciding whether the party accused of contempt has intentionally disobeyed an order, the court must strictly construe the order and determine whether the facts constitute a plain violation of that order. See Johnston v. Beneficial Mgmt. Corp., 96 Wn.2d 708, 713, 638 P.2d 1201 (1982). The purpose of this "strict construction" rule is to protect parties from contempt proceedings based on violation of orders that are ambiguous or unclear. See Graves v. Duerden, 51 Wn. App. 642, 647-48, 754 P.2d 1027 (1988); see also Trummel, 156 Wn.2d at 274 (vacating a contempt finding after noting that nothing in the order specifically prohibited contemnor from speaking with friends and posting information from those friends on the Internet).
In re Marriage of Humphreys, 79 Wn. App. 596, 903 P.2d 1012 (1995), illustrates the principle of strict construction. That case involved a dispute between parents about the religious upbringing of their daughter. Id. at 597-98. On a parenting plan modification motion, the trial court entered an order making the mother sole decision-maker in the area of religion and specifically prohibiting the father from taking his daughter to church without the mother's permission. Id. at 598. This order was appealed and remanded for additional factual findings. Id. On remand, the court made additional findings, but the new order omitted the sentence expressly requiring the mother's permission for church visits. Id. The father took his daughter to church without the mother's permission, and she filed a motion for contempt. Id. The court denied the motion for contempt and the mother appealed. Id. On appeal, Division Three of this court held that the trial court "could reasonably conclude the order was ambiguous and the father's actions did not constitute contempt. Thus, there was no abuse of discretion." Id. at 599.
Here, it is not at all clear that the order barred Crowley from working for Toysmith's suppliers. The order enjoined Crowley from "working for Toysmith" or any of Brass Key's competitors until August 18, 2007. Brass Key argues that "working for Toysmith" should be interpreted to encompass Crowley's employment with Ability because he worked on "Toysmith projects" at Toysmith's facility with Toysmith's personnel. However, Crowley was paid by Ability to assist Ability in becoming Toysmith's sole supplier for foam toys, thereby increasing the sales volume of Ability's products. While this required working with Toysmith personnel and even occasionally at Toysmith's facility, it was not the same thing as working for Toysmith.
Brass Key concedes that Ability is not one of its competitors.
Crowley's work for Ability was fundamentally different from his work for Toysmith. Ability does not sell directly to retail outlets like Toysmith and Brass Key. Indeed, as an independent vendor, it is in an adversarial relationship with Toysmith because it seeks to maximize its own profits by charging Toysmith as much as it can. Ability is not owned or controlled by Toysmith. Its foam toy product line is not the same as Toysmith's more extensive catalogue of toys, gifts, and garden products. The fact that the two companies collaborate in areas of common interest does not mean that Ability's employees or contractors can be considered to "work for" Toysmith or vice versa. Given the trial court's obligation to strictly construe the language of the order, his finding that there was no violation was reasonable.
Brass Key objects that Crowley and Toysmith were obligated to comply with the order in good faith and that they should not be permitted to evade the "intent" of the order. Brass Key contends that the order's intent was to stop Crowley from maintaining any kind of working relationship with Toysmith. However, because it is not clear that this was the intent of the order or that Crowley was barred from working for Toysmith's suppliers, Brass Key's argument that Crowley acted in bad faith is not persuasive.
The court also did not abuse its discretion in finding that Toysmith was not in contempt of the court's order. Toysmith terminated Crowley's employment in accordance with the court's order. Brass Key argues that when Ability hired Crowley, he resumed "working for" Toysmith in violation of the order because his job at Ability still involved a "working relationship" with Toysmith that had the potential to be injurious to Brass Key. But working for a company's supplier is not the same as working for the company itself. Moreover, Brass Key failed to show that it was injured in any way by Crowley's work for Ability. Under these circumstances, the trial court acted well within its discretion in finding that Toysmith was not in contempt Because we affirm the trial court's order denying Brass Key's motion for contempt, we need not reach the issue of what contempt sanctions are appropriate.
Indeed, even if we were to apply the de novo standard urged by Brass Key, our review of the record would lead us to the same result as the trial court.
Affirmed.