Can ambiguous preliminary injunction language support a contempt finding? Cook Martin Poulson v. Smith Explained

The Utah Court of Appeals recently addressed whether contempt sanctions can be imposed when a preliminary injunction order contains ambiguous language about prohibited conduct. In Cook Martin Poulson v. Smith, the court reversed a contempt finding based on the plain language interpretation of an injunction order.

Background and Facts

Daniel Smith worked as an accountant for Cook Martin Poulson PC (CMP) from 1995 until his termination in 2014 for alleged discreditable acts. Both his employment agreement and shareholders’ agreement contained non-compete provisions restricting his ability to serve former clients. After termination, CMP obtained a preliminary injunction that enjoined Smith from “soliciting or having any contact with any current client of CMP, or soliciting any person, firm, or corporation who was a customer of CMP within the 5-year period immediately preceding termination.” Smith subsequently provided accounting services to over 400 former CMP clients who he claimed contacted him first.

Key Legal Issues

The primary issue was whether Smith violated the preliminary injunction by providing services to former clients who contacted him, rather than clients he solicited. The district court also considered whether Smith violated a discovery order by refusing to produce electronic documents in the requested format. Additionally, the court addressed whether default findings imposed as sanctions adequately supported summary judgment on breach of contract claims.

Court’s Analysis and Holding

The Court of Appeals applied plain error review to Smith’s unpreserved challenge to the contempt finding. The court emphasized that injunctions must be specific and “describe in reasonable detail” the prohibited acts. Interpreting the preliminary injunction like contract language, the court found that the order’s plain language prohibited only “soliciting” former clients, not providing services to former clients who initiated contact. While contradictory language appeared in the findings and conclusions suggesting a broader prohibition, the court held this was not “sufficiently specific and definite” to modify the clearly labeled injunction order. However, the court affirmed the contempt finding for violating the discovery order, as Smith failed to produce electronic documents in the requested paper or disk format within the court’s deadline.

Practice Implications

This decision underscores the critical importance of precise drafting in preliminary injunction orders. Practitioners must ensure that the operative language clearly prohibits specific conduct, as contradictory provisions in findings and conclusions may not cure ambiguous injunctive terms. The ruling also confirms that discovery sanctions can be severe, with courts having broad discretion to strike pleadings for non-compliance with production orders, even when some cooperation is offered.