Summary
The Sixth Circuit affirmed a district court’s civil contempt finding against Charles Morris for violating an agreed order enforcing a restrictive covenant and related obligations concerning competition with Arlington Funeral Homes. The court held that Morris could not challenge provisions of the consent order without reserving a right to appeal and that the record supported the contempt finding despite his claimed advice of counsel and lack of willfulness.
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Practice areas
Questions Presented
- Whether Morris could challenge the validity of provisions in the November 30, 1990 consent decree when he had not reserved a right to appeal.
- Whether the district court abused its discretion by finding Morris in civil contempt for violating the agreed order.
- Whether Morris's advice-of-counsel defense or asserted good faith defeated civil-contempt liability.
Holdings
- A party may not appeal the entry of a consent decree unless the party reserved the right to appeal; therefore, Morris could not challenge the validity of provisions in the November 30, 1990 agreed order.
- The district court did not abuse its discretion in finding Morris in civil contempt because the record supported findings that he violated the agreed order by attending an unreasonable number of funerals as a representative of Morris Funeral Home, soliciting or promoting the competing business, and advertising his affiliation with that business.
- Advice of counsel and good-faith conduct do not relieve an individual from liability for civil contempt because willfulness is not an element of civil contempt.
Key quotations
“The primary inquiry in a civil contempt charge is whether the plaintiff took reasonable steps within his power to comply with the court's order.” (¶ 21)
“This Circuit has directed that advice of counsel and good faith conduct do not relieve an individual from liability for civil contempt as willfulness is not an element of civil contempt.” (¶ 25)
Factual background
Morris had been employed as manager of Arlington Homes and signed an employment agreement containing a two-year, fifty-mile covenant not to compete. After voluntarily resigning, he purchased and operated a competing funeral home within the restricted radius. The parties later entered an agreed order barring Morris from operating, developing, owning, or affiliating with a funeral home in the area until May 15, 1991, while permitting attendance at a reasonable number of funerals only as a private mourner. Evidence showed that Morris attended a substantial percentage of funerals at his competing funeral home, told potential customers he would resume working there, and advertised himself as its owner and manager on May 15, 1991.
Procedural history
Morris filed a declaratory-relief action in Kentucky state court, which Arlington and Century II removed to the Eastern District of Kentucky and counterclaimed for breach of the employment agreement. The district court initially found the restrictive covenant reasonable, awarded Arlington $21,000 in lost profits, and enjoined Morris from competing. After the parties jointly sought relief under Federal Rule of Civil Procedure 60(b)(6), the district court entered an agreed order on November 30, 1990, and the Sixth Circuit remanded the action for entry of that order. The district court later found Morris in civil contempt for violating the agreed order, and Morris appealed.