Petition for Writ of Certiorari — Progressive Lawn Managers, Inc., Petitioner v. Lawn Managers, Inc.

Supreme Court briefSep 28, 2020

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APPENDIX A

LAWN MANAGERS, INC., a Missouri

Corporation, Plaintiff-Appellee

PROGRESSIVE LAWN MANAGERS, INC.,

a Missouri Corporation, Defendant-Appellant.

No. 18-2658

United States Court of Appeals,

Eighth Circuit.

Submitted: April 17, 2019

Filed: May 20, 2020

Rehearing and Rehearing En Banc

Denied June 29, 2020

Appeal from United States District Court for the

Eastern District of Missouri – St. Louis

Counsel who presented argument on behalf of the

appellant and appeared on the brief was Don V. Kelly,

of Saint Louis, MO. The following attorney also appeared on the appellant brief: Alexander Hurst, of

Saint Louis, MO.

Counsel who presented argument on behalf of the

appellee and appeared on the brief was Norah J. Ryan,

of Saint Louis, MO. The following attorney also appeared on the appellee brief: Annette P. Heller, of Saint

Louis, MO.

Before SMITH, Chief Judge, KELLY and KOBES,

Circuit Judges.

KELLY, Circuit Judge.

In this trademark infringement case, Progressive

Lawn Managers, Inc., (Progressive) appeals from the

district court’s1 findings of fact and conclusions of law

after a bench trial finding it liable for trademark infringement and awarding damages to Lawn Managers,

Inc. (Lawn Managers). We affirm.

Lawn Managers and Progressive are two Missouri

lawn care businesses owned by Randy Zweifel and

Linda Smith, respectively. Prior to Smith’s incorporation of Progressive, she and Zweifel were married and

together owned and operated Lawn Managers for

nearly 20 years in the St. Louis area. In April 2012,

Zweifel and Smith divorced and entered into a marital

settlement agreement (MSA) that was incorporated

into a divorce decree issued by the Circuit Court of

Jefferson County, Missouri, the following month.

Section 5 of the MSA, which we understand to be

the parties’ trademark licensing agreement, disposed

of Zweifel’s and Smith’s interests in the Lawn Managers business. Smith agreed to assign her 50% interest

in the company to Zweifel. Zweifel would retain the

The Honorable David D. Noce, United States Magistrate

Judge for the Eastern District of Missouri, to whom the case was

referred for final disposition by consent of the parties pursuant to

28 U.S.C. § 636(c).

corporate name of Lawn Managers, Inc., and all right,

title, and interest in the business, except for, as relevant here, some commercial and residential accounts

and business equipment specifically awarded to Smith,

who would now operate a separate business. Section

5.02 divided Lawn Managers’ then-existing accounts

and accounts receivables. It awarded “all right, title,

and interest” in certain enumerated commercial accounts to Smith; the remainder went to Zweifel. Residential accounts, in turn, were divided by zip code, with

each party receiving “all right, title, and interest in all

residential accounts and accounts receivables” contained within specified zip codes. Section 5.03 divided

between the parties various vehicles, outdoor equipment, and indoor office equipment.

Section 5.06 specified the conditions for the parties’ “Development of New Business” and provided that

the parties would share the use of the corporate name

“Lawn Managers” for a period of time. Zweifel and

Smith agreed that Zweifel would retain ownership and

control of the Lawn Managers business but that Smith

could use the corporate name “Lawn Managers” for two

years after the dissolution of their marriage by establishing a new lawn care company “using the name Progressive Lawn Managers, Inc. doing business as Lawn

Managers.” While Smith used the name Lawn Managers, she could “use the credit of Lawn Managers, Inc. to

purchase equipment for her new business,” provided

she ensured Zweifel would not be liable for her purchases. At the end of the two years, Smith would discontinue her use of the Lawn Managers name and

would use only the name Progressive Lawn Managers.

The parties also agreed to a non-solicitation clause

providing that for two years after the dissolution of

their marriage, “[Smith] and her employees [would] refrain from soliciting residential accounts and commercial accounts in the zip codes that have been awarded

to [Zweifel],” and Zweifel would do the same in Smith’s

zip codes.

Not long after their divorce was finalized, Zweifel

and Smith commenced divorce-related litigation in

state court. Smith filed her first motion for contempt

against Zweifel in early 2013, followed by cross-motions filed by each party. On July 25, 2014, Zweifel and

Smith settled their cross-motions through a written

agreement that changed a few terms of the licensing

agreement. The Settlement Agreement extended

Smith’s ability to use the Lawn Managers name to December 31, 2014. It also changed the parties’ limitations on obtaining new business. The parties could now

any new residential accounts in the zip codes awarded

to the other in their divorce settlement. . . .” The Settlement Agreement specified that “[t]his non compete

agreement shall remain in effect for two years from

[July 25, 2014,] and is enacted in lieu of the prior nonsolicitation clause found in [§] 5.06 of the [licensing

agreement].”

As contemplated by the licensing agreement,

Zweifel continued to operate the Lawn Managers business, and Smith began operating Progressive using

both the name Progressive Lawn Managers and,

simply, Lawn Managers. Smith’s company used the

two names in advertisements, business materials, and

representations to third parties. Some employees who

worked for Lawn Managers before the divorce went to

work for Smith. The public, however, did not know of

Zweifel and Smith’s divorce or the terms of the licensing agreement.

In February 2015, after Smith was to stop using

the Lawn Managers name, Lawn Managers registered

the word mark “Lawn Managers” with the U.S. Patent

and Trademark Office. Later that year, Lawn Managers sent Progressive a letter stating that it considered

Progressive’s logo to infringe on the Lawn Managers

mark. Progressive did not make any changes to its

logo.

Lawn Managers sued Progressive in February 2016,

asserting one count of federal trademark infringement

under the Lanham Act, see 15 U.S.C. § 1114, and seeking injunctive and monetary relief. Progressive counterclaimed, asserting one count of cancellation of the

trademark registration by virtue of “naked licensing.”

As relevant here, Progressive also raised the affirmative defense of unclean hands.

After a bench trial, the district court entered judgment in favor of Lawn Managers. The court found

that through the licensing agreement, Zweifel had

granted a license to Smith to use the Lawn Managers

trademark, and that the license had not been a naked

license. Next, it found that Progressive had infringed

on the Lawn Managers mark after the expiration of the

license on December 31, 2014. As relevant here, the

court found that Progressive continued to use the mark

in commerce after that date without consent and, that

between 2012 and 2015, there was “constant and obvious consumer confusion, due to the post-divorce proceedings and the resulting . . . license agreement.” And

the district court found that after the expiration of the

license, “[Progressive] did not make a good-faith effort

to dissipate confusion, but acted to deliberately exacerbate any consumer confusion with the intent of profiting from [Lawn Managers’] accrued consumer goodwill

for as long as possible.”

The district court entered an injunction and

awarded Lawn Managers damages of $80,688—comprising a percentage of Progressive’s profits during the

relevant time period—and $71,346 for corrective advertising. In calculating its damages award, the court

rejected Progressive’s unclean hands defense. In a

post-trial order, the court also awarded Lawn Managers $138,925 in attorney’s fees.

On appeal, Progressive does not contest the district court’s finding of infringement. But it argues that

the issue should not have been reached because

Zweifel granted a naked license to Smith, resulting in

the abandonment of the Lawn Managers mark. In the

alternative, Progressive argues that the district court

improperly rejected its unclean hands defense and

abused its discretion in its award of damages. After a

bench trial, we review the district court’s legal conclusions de novo and its factual findings for clear error.

Urban Hotel Dev. Co., Inc. v. President Dev. Grp., L.C.,

535 F.3d 874, 879 (8th Cir. 2008).

“As a general matter, trademark owners have a

duty to control the quality of their trademarks.”

FreecycleSunnyvale v. Freecycle Network, 626 F.3d

509, 515 (9th Cir. 2010). “The purpose of the qualitycontrol requirement is to prevent the public deception

that would ensue from variant quality standards under the same mark. . . .”2 Taco Cabana Int’l, Inc. v. Two

Pesos, Inc., 932 F.2d 1113, 1121 (5th Cir. 1991), aff ’d on

other grounds sub nom. Two Pesos, Inc. v. Taco Cabana,

Inc., 505 U.S. 763 (1992); see, e.g., Syntex Labs., Inc. v.

Norwich Pharmacal Co., 315 F. Supp. 45, 56 (S.D.N.Y.

1970) (emphasizing that “the purpose of the control requirement is to avoid the danger that the public may

be deceived as to the quality of a product sold under a

recognized name” (emphasis added)), aff ’d, 437 F.2d

566 (2d Cir. 1971). Naked licensing occurs when a

trademark owner licenses a mark without exercising

Notably, “`quality control’ does not necessarily mean that

the licensed goods or services must be of `high’ quality, but merely

of equal quality, whether that quality is high, low or middle.”

Barcamerica Int’l USA Tr. v. Tyfield Imps., Inc., 289 F.3d 589,

598 (9th Cir. 2002) (cleaned up).

sufficient quality control over the services provided

under the mark. See, e.g., Stanfield v. Osborne Indus.,

Inc., 52 F.3d 867, 871 (10th Cir. 1995), abrogated on

other grounds by Lexmark Int’l, Inc. v. Static Control

Components, Inc., 572 U.S. 118 (2014); FreecycleSunnyvale, 626 F.3d at 515–16. “[Naked licensing] is

inherently deceptive and constitutes abandonment of

any rights to the trademark by the licensor.” Stanfield,

52 F.3d at 871 (cleaned up).

To succeed on a claim of naked licensing, a party

must establish that the licensor did not retain sufficient control over its licensee to guarantee consistent

quality of the services provided under the mark. See,

e.g., id. Because a finding of naked licensing results in

involuntary trademark abandonment and the forfeiture of trademark rights, the party claiming insufficient control must prove it by clear and convincing

evidence. See Cmty. of Christ Copyright Corp. v. Devon

Park Restoration Branch of Jesus Christ’s Church, 634

F.3d 1005, 1010 (8th Cir. 2011). This is a “stringent

standard.” Taco Cabana, 932 F.2d at 1121; see also,

e.g., Ky. Fried Chicken Corp. v. Diversified Packaging

Corp., 549 F.2d 368, 387 (5th Cir. 1977). Determining

“whether the control exercised by the licensor is sufficient under the circumstances to satisfy the public’s

expectation of quality assurance arising from the presence of the trademark on the licensee’s goods or services” is a fact-specific inquiry, as “[t]he standard of

quality control and the degree of necessary inspection

and policing by the licensor will vary with the wide

range of licensing situations in use in the modern

marketplace.” 3 J. Thomas McCarthy, McCarthy on

Trademarks and Unfair Competition § 18:55 (5th ed.

2017) [hereinafter McCarthy] (cleaned up); see, e.g.,

Eva’s Bridal Ltd. v. Halanick Enters., Inc., 639 F.3d

788, 790–91 (7th Cir. 2011) (explaining that how much

control is “enough can’t be answered generally; the

nature of the business, and customers’ expectations,

both matter”).

To determine whether a licensor exercises sufficient control, and so may enforce the terms of the

trademark’s use, courts evaluate whether the licensor

“(1) retained contractual rights to control the quality

of the use of its trademark; (2) actually controlled the

quality of the trademark’s use; or (3) reasonably relied

on [the licensee] to maintain the quality.” FreecycleSunnyvale, 626 F.3d at 512 n.1; accord Stanfield, 52

F.3d at 871–72 (applying the same factors). The district

court found, and the parties do not dispute, that the

licensing agreement in this case contained no express

contractual right of control and that there was no evidence of actual control by Lawn Managers. This appeal

therefore turns on whether, as the district court found

was the case here, the licensor could reasonably rely

on the licensee to maintain the quality of the services

sold under the licensor’s mark.

Courts have found that a licensor may reasonably

rely on a licensee for quality control where the parties

have enjoyed a long-term professional association,

often termed a “special relationship.” See 3 McCarthy

§ 18:57. In finding reasonable reliance, these courts

have also stressed the lack of evidence showing

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deviant quality in the products or services provided by

the licensee. For example, in Land O’Lakes Creameries, Inc. v. Oconomowoc Canning Co., the Seventh Circuit rejected a naked licensing claim where the

licensor and licensee enjoyed a 40-year relationship

and there had been “no complaints about the quality of

the goods” during that time. 330 F.2d 667, 670 (7th Cir.

1964). Likewise, in Taco Cabana, the Fifth Circuit rejected a naked licensing claim against two brothers

who had cross-licensed their trade dress to one another

for use in separate restaurants, but whose licensing

agreement did not include any formal provisions establishing quality control. 932 F.3d at 1121. The court

held that the brothers could reasonably rely on each

other to maintain consistent quality because they had

enjoyed a close working relationship for eight years

and were intimately familiar with the standards and

procedures necessary to ensure consistent quality. Id.

at 1121–22. Similarly, in Transgo, Inc. v. Ajac Transmission Parts Corp., the Ninth Circuit rejected an

abandonment claim against a licensor, finding adequate control where the licensor had a relationship

with the licensee going back ten years, manufactured

90% of components sold by the licensee, and “believed

that [licensee] was second only to [the licensor] himself

in overall knowledge and ability in product development for th[e] market.” 768 F.2d 1001, 1017–18 (9th

Cir. 1985).

On this record, we agree with the district court

that Progressive has not met its high burden of proving that Lawn Managers abandoned its mark through

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naked licensing. The district court properly found that

Zweifel could reasonably rely on Smith’s own quality

control efforts and thus met the duty of control as licensor.

Of crucial importance in this case are the unique

circumstances surrounding the licensing agreement.

The licensing agreement was the result of a divorce

and provided that Zweifel and Smith would, in effect,

operate parallel, almost identical companies using

the same name3 and similar equipment and vehicles

but in different zip codes. The licensing agreement

split property, such as trucks and various lawn equipment, between Lawn Managers and Progressive.

Among other things, it also provided that Smith could

use Lawn Managers’ credit to purchase equipment for

her new business. In essence, then, the licensing agreement provided that Zweifel and Smith would operate

virtually the same business for a fixed period of time,

or as Progressive asserts on appeal, that Progressive

would “impersonate” Lawn Managers for the duration

of the license period. After the licensing period terminated, so too did Smith’s permission to use the name

Lawn Managers.

These terms, combined with the couple’s successful operation of the Lawn Managers business for over

17 years and the lack of any evidence of quality deviations at Progressive, are sufficient to support the

district court’s finding of reasonable reliance. It is

Smith was to use Progressive Lawn Managers, doing business as Lawn Managers.

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reasonable to expect that Smith was familiar with the

standards and procedures used to control quality at

Lawn Managers, and that she would use those same

standards and procedures at Progressive for the specified period after the divorce. Indeed, as the district

court found, “[t]he work crews employed by [Progressive] had previously been employed by [Lawn Managers] and made use of the same procedures and

equipment they had always used.” The carryover of

workers from Lawn Managers to Progressive indicated

a continuity of services, and there is no evidence in the

record that the services provided by Progressive differed in quality from those provided by Lawn Managers. To the contrary, Lawn Manager’s crews “observed

the work being done by [Progressive’s] crews and observed and reported that the work [they] performed . . .

was consistent with [Lawn Managers’] standards.” Under these circumstances, “we would depart from the

purpose of the law to find an abandonment simply for

want of all the inspection and control formalities” appropriate in cases involving more formal licensing

transactions. Taco Cabana, 932 F.2d at 1121.

Further, the district court’s findings of fact and

conclusions of law paint a picture of Smith, at Progressive, doing her best to emulate Zweifel and Lawn

Managers. Smith used an advertisement video on her

website that described Progressive as having been in

business for a number of years. This was not true, but

the statement is evidence that Progressive intended

to hold itself out as Lawn Managers and to advertise

the same quality of services that Lawn Managers had

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always provided. Moreover, Smith was operating Progressive in the same geographic area as Lawn Managers, and Lawn Manager employees were in a position

to observe that Progressive’s work was consistent

with Lawn Managers’ standards. Lawn Managers

could reasonably rely on Smith’s quality control efforts

and conclude that the services offered by Progressive

were “of equal quality.” Barcamerica, 289 F.3d at 598.

This conclusion aligns with the consensus of our

sister circuits. A licensor’s confidence in the licensee’s

ability to maintain quality, without more, may not be

sufficient to show reasonable reliance.4 But courts

have consistently concluded that a “special relationship” can confer adequate quality control. Stanfield 52

F.3d at 867 (“In cases in which courts have found that

a licensor justifiably relied on a licensee to quality control, some special relationship existed between the parties. . . . [In this case] in contrast, the relationship . . .

was neither close nor successful.”). Accord FreecycleSunnyvale, 626 F.3d at 518 (citing Barcamerica, 289

F.3d at 597); Land O’Lakes, 330 F.2d 667 (no naked license when company’s name was on the label and

there were no complaints about the quality of the

goods during the forty years of the license agreement).

See, e.g., FreecycleSunnyvale, 626 F.3d at 519 (“Because

sole reliance on a licensee’s own control quality [sic] efforts is not

enough to overcome a finding of naked licensing without other indicia of control, and because [the licensor] lacked a close working

relationship with [the licensee] and failed to show any other indicia of actual control, we conclude that [the licensor] could not

rely solely on [the licensee’s] own quality control efforts.” (internal

citation omitted).

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Here, Zweifel and Smith had a long, close, and successful relationship operating Lawn Managers together.

They were later bound by the MSA to continue operating parallel lawn care businesses for a comparatively

short period of time after their divorce. The district

court did not err in concluding that, under the circumstances, the “business relationship between Zweifel

and Smith was more than sufficient to give [Lawn

Managers] reasonable assurance of the quality of service [Progressive] would provide to customers.”

In urging us to reach a contrary conclusion, Progressive argues that Zweifel could not reasonably rely

on Smith’s own quality control efforts because his relationship with Smith was adversarial, as evidenced by

the contempt proceedings in state court. But there is

no evidence in the record that the companies Zweifel

and Smith run—Lawn Managers and Progressive—

were adversarial toward one another in ways that

would affect the quality of the parties’ lawn care services. Indeed, even though Zweifel testified that he was

not in a position to ask Smith whether he could oversee

the quality at Progressive—because they “were not

talking at that time”—there is evidence in the record

that others at Lawn Managers were keeping an eye on

Progressive’s work. Scott Hewett, Lawn Managers’s

general manager, testified that he had observed the

quality of Progressive’s work and concluded that “the

lawns seemed good, they seemed fine.” Zweifel and

Smith’s personal relationship, post-divorce, appears

from the record to have been acrimonious. But this,

standing alone, is not sufficient to conclude that Lawn

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Managers could not rely on Smith’s business-related

expertise and experience to maintain the quality of

Progressives’ lawn services during the life of the MSAmonitored license agreement.

In light of the particular facts and circumstances

in this record, the district court did not err in finding

that Progressive failed to meet its stringent burden of

proving a naked license. See Barcamerica, 289 F.3d at

596.

Progressive next argues that the district court improperly denied its unclean hands defense. We review

the district court’s decision to deny an equitable defense for an abuse of discretion. Sturgis Motorcycle

Rally, Inc. v. Rushmore Photo & Gifts, Inc., 908 F.3d

313, 343 (8th Cir. 2018); see Levi Strauss & Co. v.

Shilon, 121 F.3d 1309, 1313 (9th Cir. 1997).

The defense of unclean hands may be invoked

when the plaintiff has “engaged in ‘willful act[s] concerning the cause of action which rightfully can be said

to transgress equitable standards of conduct.’ ” Sturgis,

908 F.3d at 344 (alteration in original) (quoting Precision Instrument Mfg. Co. v. Auto. Maint. Mach. Co., 324

U.S. 806, 815 (1945)). Before the district court, Progressive argued that Lawn Managers had unclean hands

because it sent a “We Want You Back” mailer in late

July 2016 to approximately 2,000 of Progressive’s customers. According to Progressive, the licensing agreement awarded these customer accounts to Smith in

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perpetuity, and Lawn Managers was prohibited from

ever soliciting those customers. The district court rejected Progressive’s assertion, concluding that the licensing agreement unambiguously provided that after

July 25, 2016—when the parties’ non-compete clause

expired—Lawn Managers was entitled to renew advertising to all customers.

The district court’s rejection of Progressive’s unclean hands defense turns on the interpretation of the

licensing agreement, which is an issue we review de

novo. In re Fitzgerald Marine & Repair, Inc., 619 F.3d

851, 858 (8th Cir. 2010). Under Missouri law, which the

parties agree applies here, “[t]he cardinal rule in the

interpretation of a contract is to ascertain the intention of the parties and to give effect to that intention.”

J. E. Hathman, Inc. v. Sigma Alpha Epsilon Club, 491

S.W.2d 261, 264 (Mo. banc 1973). If the contract is unambiguous, “the intention of the parties is to be gathered from it and it alone.” Id. “A contract is ambiguous

only when it is reasonably susceptible of different constructions”; mere disagreement between the parties as

to construction does not render the contract ambiguous. Id.

Like the district court, we conclude that there is

no relevant ambiguity in the licensing agreement

and that Lawn Managers was permitted to send the

“We Want You Back” mailer in July 2016. The licensing

agreement originally contained a non-solicitation

clause in § 5.06 that was to be in effect for two years

after the parties’ divorce. This clause, however, was replaced entirely by a non-compete agreement contained

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in the parties’ July 25, 2014, Settlement Agreement.

This non-compete agreement provides:

[The p]arties agree that each of them shall not

the zip codes awarded to the other in the [licensing

agreement]. This non compete agreement shall remain in effect for two years from today’s date and

is enacted in lieu of the prior non-solicitation

clause found in [§] 5.06 of the [licensing agreement]. . . .

(Emphasis in original). By its plain language, then,

the Settlement Agreement provided that the only restriction placed on Zweifel with respect to competition

for customer accounts was that, through July 25, 2016,

he could not “sign up or service any new residential accounts” in the zip codes encompassing the residential

accounts that had been awarded to Smith in § 5.02.

And there is nothing else in the licensing agreement

that can reasonably be interpreted to place any other

limits on the parties’ solicitation of any accounts.

Progressive nevertheless argues that Lawn Managers could not solicit certain accounts even after July

25, 2016. Progressive’s sole assertion is that the initial

division of accounts in § 5.02 effectively gave Smith a

perpetual property interest in certain customer accounts, and that those accounts thus remained offlimits to Zweifel forever. But § 5.02 merely divided the

customer accounts of the pre-divorce Lawn Managers

business. It states only that “[Smith] is awarded all

right, title, and interest” in certain commercial accounts and that “[she] is awarded all right title, and

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interest in all residential accounts and accounts receivables of the corporation in the [listed] zip codes.”

By its plain language, this initial division of assets is

wholly unrelated to restrictions on solicitation or competition.5 And Progressive points to nothing in the rest

of the licensing agreement that prohibited the parties

from eventually competing for the accounts initially divided up in § 5.02. “[A] court’s duty is confined to the

interpretation of the contract which the parties have

made for themselves, . . . and a court may not read into

a contract words which the contract does not contain.”

Textor Const., Inc. v. Forsyth R-III Sch. Dist., 60 S.W.3d

692, 698 (Mo. Ct. App. 2001) (cleaned up). Accordingly,

the district court was within its discretion to conclude

that the Lawn Managers mailer did not support Progressive’s unclean hands defense.6

Progressive next argues that the district court

clearly erred in awarding to Lawn Managers $80,688

of Progressive’s profits—constituting 25% of Progressive’s total profits during the relevant time period—

Progressive’s contrary argument—to which it devotes much

of its brief—that the accounts divided in § 5.02 constituted marital property and therefore could never be solicited again, misapprehends that this is a trademark infringement action in federal

court, and that its unclean hands defense turns on the language

of the licensing agreement before us.

Progressive also challenges the district court’s finding that

there was no other evidence in the record supporting its unclean

hands defense. Based on our thorough review of the record, this

finding is not clearly erroneous.

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and $71,346 for corrective advertising. “In a bench

trial, ascertaining the plaintiff ’s damages is a form of

factfinding that can be set aside only if clearly erroneous.” Hall v. Gus Const. Co., 842 F.2d 1010, 1017 (8th

Cir. 1988). Under that standard of review, we will reverse “only if we are ‘left with the definite and firm

conviction that a mistake has been committed.’ ” Id. at

1013 (quoting Anderson v. City of Bessemer City, 470

U.S. 564, 573 (1985)).

The district court did not clearly err in its damages

award. In an action for trademark infringement, a

plaintiff may recover, “(1) defendant’s profits, (2) any

damages sustained by the plaintiff, and (3) the costs of

the action.” 15 U.S.C. § 1117(a); see Tonka Corp. v.

Tonk-A-Phone, Inc., 805 F.2d 793, 794 (8th Cir. 1986).

In awarding Lawn Managers $80,688 of Progressive’s

profits, the district court first found—based on expert

reports and Progressive’s tax returns and financial

statements—that Progressive’s total profits during the

relevant time period were $322,753. On appeal, Progressive argues that the district court’s starting point

should have been lower, because, among other things,

the parties were bound by a non-compete agreement

for some months after the license expired. As a result,

Progressive asserts, Lawn Managers did not lose any

business due to the infringement during that period.

But in a trademark case, the defendant bears the burden of proving any claimed deductions from total

profits. See § 1117(a) (“In assessing profits the plaintiff

shall be required to prove defendant’s sales only; defendant must prove all elements of cost or deduction

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claimed.”); see also 5 McCarthy § 30:65 (“[I]t is the infringer’s burden to prove any proportion of his total

profits which may not have been due to use of the infringing mark.”). And the district court found that Progressive had not submitted any credible evidence

supporting its proposed reductions. Progressive points

to nothing in the record that renders this finding

clearly erroneous. But even more damaging to Progressive’s position, in the end, is that the district court did

consider Progressive’s claimed causation problems.

The district court awarded to Lawn Managers only

25% of Progressive’s total profits, finding that an

award in the full amount of $322,753 would be excessive for two reasons: (1) it was “difficult to trace causation from confused customers to an infringing act of

[Progressive] instead of to [Lawn Managers’] two-year

license”; and (2) from the expiration of the license on

January 1, 2015, to July 25, 2016, the parties were under a non-compete agreement. The district court’s reduction was within its power to consider equitable

principles in awarding damages, see § 1117(a) (Lanham Act monetary remedies are “subject to the principles of equity”), and we find no clear error in the

district court’s award.

We reach a similar conclusion with respect to the

court’s corrective advertising award. Courts have approved monetary awards to plaintiffs for “corrective

advertising” under the general rubric of “compensatory

damages.” See, e.g., Big O Tire Dealers, Inc. v. Goodyear

Tire & Rubber Co., 561 F.2d 1365, 1374–76 (10th Cir.

1977). “The purpose of general compensatory damages

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is to make the plaintiff whole.” Id. at 1374. A trademark infringer “diminishes the value of plaintiff ’s

trademark, and advertising restores that mark to its

original value.” Zazu Designs v. L’Oreal, S.A., 979 F.2d

499, 506 (7th Cir. 1992).

In its award for corrective advertising, the district

court credited Lawn Managers’ expert, economist Fernando Torres, who opined that “a reliable estimate of

the cost of a corrective advertising campaign to redress

[the wrongful marketing impressions created by Progressive’s infringing conduct] . . . would be the cost of

mailing a flyer” to households in the zip codes encompassing the accounts Smith was awarded in § 5.02 of

the licensing agreement and that opened up to competitive activity after the expiration of the non-compete

restriction in July 2016. According to Torres, the total

cost for this corrective advertisement was $71,346. On

appeal, Progressive argues that Torres’s estimate was

flawed because it did not explicitly consider how many

of the households in those zip codes had ever seen Progressive’s infringing advertisements or had ever used

Progressive’s services. Additionally, it argues, Torres

“could not say” how many of these households had a

yard or had ever seen a mailer in the past. But “[m]ere

difficulty in calculating damages is not sufficient reason to deny relief, as we have repeatedly stressed that

some uncertainty in damages should not work to bar a

plaintiff from recovering from a proved wrongdoer.”

WWP, Inc. v. Wounded Warriors Family Support, Inc.,

628 F.3d 1032, 1044 (8th Cir. 2011) (cleaned up). We

22a

find no clear error in the district court’s award for corrective advertising.7

Accordingly, the judgment of the district court is

affirmed.

KOBES, Circuit Judge, dissenting.

No one thinks the Marital Separation Agreement

(MSA) is a model trademark transaction. It emerged

from a contentious divorce of two people who lived and

worked side-by-side for more than 17 years. The MSA

tried to walk a fine line by giving each spouse their

sweat equity in Lawn Managers and preserving their

livelihood. But the catch is that trademarks are also

public rights. When the mark holder abuses the mark

by deceiving the public, those rights are lost.

“A trademark carries with it a message that the

trademark owner is controlling the nature and quality of the goods or services sold under the mark.” 3

McCarthy on Trademarks and Unfair Competition

§ 18:48 (5th ed. 2017). The court holds that

Zweifel/Lawn Managers did not grant a naked license

because he could reasonably rely on his former

spouse’s (Smith/Progressive) quality control efforts.

In a single footnote in its opening brief, Progressive asserts

that the district court’s award of attorney’s fees in favor of Lawn

Managers was improper. But because Progressive did not meaningfully argue this point in its opening brief, it has waived it. See,

e.g., United States v. Stanko, 491 F.3d 408, 415 (8th Cir. 2007);

Chay-Velasquez v. Ashcroft, 367 F.3d 751, 756 (8th Cir. 2004).

23a

Zweifel admitted, though, that there was “no way possible” for him to control quality.

This extends the “reasonable reliance” doctrine too

far. A close working relationship may substitute for

formal controls, but a prior relationship is insufficient

without some indicia of control. FreecycleSunnyvale v.

Freecycle Network, 626 F.3d 509, 518–19 (9th Cir.

2010). This is the first time a court has approved a license without an ongoing relationship to monitor and

prevent misleading uses of the mark. Our sister circuits have found that a licensor who does “not retain

any control” has engaged in naked licensing and forfeited its rights. Eva’s Bridal Ltd. v. Halanick Enterprises, Inc., 639 F.3d 788, 791 (7th Cir. 2011) (emphasis

in original); Barcamerica Int’l USA Tr. v. Tyfield Importers, Inc., 289 F.3d 589, 597 (9th Cir. 2002) (naked

licensing when licensor fails to “demonstrate[ ] any ongoing effort to monitor quality”); Stanfield v. Osborne

Indus., Inc., 52 F.3d 867, 872 (10th Cir. 1995) (naked

licensing when parties have adversarial relationship

during license). I would not break from this consensus.

Nor does licensee estoppel apply. Our precedent

only bars a licensee from challenging the mark during

the life of the license. Lawn Managers requests damages for infringement after the license expired, and the

license caused consumer confusion, so Progressive is

not estopped from asserting a naked licensing defense.

24a

If a licensor that does not take reasonable steps

“to prevent misuses of his trademark in the hands of

others the public will be deprived of its most effective

protection against misleading uses of a trademark.”

Dawn Donut Co. v. Hart’s Food Stores, Inc., 267 F.2d

358, 367 (2d Cir. 1959). Although the court’s decision

accurately recites the applicable standards, it concludes that a licensor has sufficient control by having

none at all. This fails to protect the public from naked

licensing—a practice that “is inherently deceptive and

constitutes abandonment of any rights to the trademark by the licensor.” Barcamerica, 289 F.3d at 598

(citation omitted).

The cases the court relies on all show some form

of licensor control. None hold that a defunct, adversarial business relationship is sufficient. The mark holder

in Transgo made 90% of the components in the trademarked “Shift Kits,” and therefore relied on its “own

quality control procedures at its plant.” Transgo, Inc. v.

Ajac Transmission Parts Corp., 768 F.2d 1001, 1017

(9th Cir. 1985). Further, the mark holder and the licensee conferred on modifications to existing parts and the

development of new products to be sold under the

trademark. Id. In Taco Cabana Int’l, Inc. v. Two Pesos,

Inc., 932 F.2d 1113 (5th Cir. 1991), a jury found “Taco

Cabana exercises adequate supervision and control

over TaCasita.” 932 F.2d at 1117. Although it opined

that the “purpose of the quality-control requirement”

is quality not policing, the Fifth Circuit acknowledged

25a

“record evidence of at least some bilateral quality monitoring.” Id. at 1121.

The Seventh Circuit has found reasonable reliance

when the licensor appeared on the label and the long

history without complaints. Land O’Lakes Creameries,

Inc. v. Oconomowoc Canning Co., 330 F.2d 667, 670

(7th Cir. 1964). But the district court earlier found

that the licensor had “retained the right of supervision

over all labels and products bearing the mark.” Land

O’Lakes Creameries, Inc. v. Oconomowoc Canning Co.,

221 F. Supp. 576, 581 (E.D. Wis. 1963). The district

court held that the “practice of the parties and the contract conditions render the license arrangement more

than a naked license.” Id.

Taken together, the cases cited by the court allow

reasonable reliance through a “special relationship”

when the mark holder had some control over the products. Here, the court holds that a “special relationship”

alone confers adequate quality control. Maj. Op. 91011. And the court does not acknowledge the further

step it takes today: allowing a licensor to rely on the

licensee because of a past relationship that has gone

bad.

The court finds that Zweifel could reasonably rely

on Smith because the license ensured that they “would

operate the same business for a fixed period of time.”

Maj. Op. 910. This is besides the point because Zweifel

did not retain “the right to control the nature and quality of defendant’s use of the mark.” Lawn Managers,

Inc. v. Progressive Lawn Managers, Inc., 390 F. Supp.

26a

3d 975, 982 (E.D. Mo. 2018). The three-sentence license

merely permitted Progressive to “do[ ] business as

Lawn Managers” and allowed Smith to “use the name

Lawn Managers for” two years after the divorce. Add.

15–16. It did not limit or guide Progessive’s choices in

offering services, training employees, purchasing

equipment, or adhering to quality standards.

The court also holds that Progressive “has not met

its high burden” to prove naked licensing by overlooking key evidence. Maj. Op. 909. When asked whether

he had approached Smith (or anyone at Progressive)

about the quality of their services, Zweifel testified,

“No. We were not talking at that time. There was no

way possible to approach her like that.” D. Ct. Dkt. 109,

10/30/17 Tr. 115:23–116:3 (emphasis added). Zweifel

claimed, by “looking at her most recent website,” that

Smith “offers the exact same” treatments. Id. at 76:2–

5. Smith, however, explained that “I change my product

and my applying at different times per what we’re

learning every year.” D. Ct. Dkt. 110, 10/31/17 Tr.

125:19–126:1. Lawn Managers’s general manager,

Scott Hewett, testified that although he had observed

lawns Progressive had serviced, he stopped supervising Progressive employees “right at the time of the separation.” Id. at 41:22–42:3. There is no evidence that

Lawn Managers “made any effort to supervise defendant’s work.” Lawn Managers, 390 F. Supp. 3d at 983.

Progressive did more than show Lawn Managers’s

lacked sufficient control, it proved the “extreme case”

where the licensor had none. Eva’s Bridal Ltd., 639

F.3d at 791.

27a

Trying to show evidence of some oversight, the

court notes that “others at Lawn Managers were keeping an eye on Progressive’s work.” Maj. Op. 911. Yet

it cites no case where casual observation, without an

ongoing relationship, is sufficient to permit the mark

holder to reasonably rely on the licensee. And in

Barcamerica, the court rejected the mark holder’s assertion of quality control through informal wine tastings. 289 F.3d at 598. “What matters is that [the mark

holder] played no meaningful role in holding the [product] to a standard of quality.” Id.

As a result, the court approves a license that

caused “constant and obvious consumer confusion.”

Lawn Managers, 390 F. Supp. 3d at 979. Customers

were dumbfounded when they were told that Lawn

Managers “can’t service your ZIP Code” as “Lawn Managers” trucks drove through their neighborhood. Id.

And more “confusion manifested itself in phone calls to

one party meant for the other party and checks that

had to be hand-sorted to make sure they went to the

correct company.” Id. Progressive impersonating Lawn

Managers without any guarantee that the goods and

services were the same is the very harm to the public

that trademarks seek to prevent. Because the license

deceived the public Lawn Managers forfeits the mark.

II.

The court’s decision is also hard to square with

those of our sister circuits that require the mark holder

to show some indicia of control and oversight through

28a

an ongoing relationship. The court does not dispute

that Zweifel had no relationship with Smith after the

divorce and any oversight was limited to casual observation. I cannot agree that a licensor who admitted he

did not talk to the licensee somehow maintained a special relationship that permits a court to infer an indicia

of control over quality.

The Seventh Circuit rejected a similar licensing

scheme in Eva’s Bridal. There, a family-owned dress

shop licensed its name to the owner’s siblings after the

siblings purchased a location that they had operated

for eight years. Eva’s Bridal Ltd. v. Halanick Enterprises, Inc., No. 07 C 1668, 2010 WL 9921849 *2 (N.D.

Ill. Aug. 4, 2010). The relevant agreement only required payment of $75,000 per year to use the “Eva’s

Bridal” name and marks. Eva’s Bridal Ltd., 639 F.3d at

789. After the agreement expired, the siblings stopped

paying the royalty but continued using the mark. Id.

The mark holders brought an infringement action five

years later. The district court dismissed the suit because it held that plaintiffs had abandoned the mark

by granting a naked license. Id. Specifically, it found

that the agreement had no quality control provisions

and that plaintiffs had “never tried to control any aspect of how defendants’ shop operated or how the mark

was used.” Id. at 790.

The Seventh Circuit affirmed, explaining that the

“supervision required for a trademark license is the

sort that produces consistent quality.” Id. (emphasis in

original). Although the amount of control is a factual

question, the Seventh Circuit found that it was

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unnecessary to decide that “because plaintiffs did not

retain any control—not via the license agreement, not

via course of performance.” Id. at 790–91 (emphasis in

original). It was the “paradigm of a naked license” because the mark holder had “no authority over the appearance and operations of defendants’ business, or

even over what inventory to carry or avoid.” Id. at 791

(emphasis in original).

The Ninth and Tenth Circuits have also required

an indicia of control without an ongoing relationship.

Barcamerica, 289 F.3d at 596; Stanfield, 52 F.3d at 872.

In Stanfield, an inventor of a fiberglass heating pad for

newborn hogs received royalties from the manufacturer

and later sold the rights to use “Stanfield” for 15 years.

52 F.3d at 869. Shortly after signing the licensing

agreement, the inventor resigned from the company

and had no contact with it except for litigation over

royalty payments and the trademark. Id. at 870. The

Tenth Circuit affirmed the district court’s naked license

finding because there was no express quality control

provision or actual control and the only relationship

between the parties existed in court.8 Id. at 871–72.

The court notes that Lawn Managers and Progressive (the

companies vis à vis Zweifel and Smith) were not “adversarial in

ways that would affect the quality of the parties’ lawn care services.” Maj. Op. 911. But the Tenth Circuit did not find an adversarial relationship because the quality of the pig heating pads had

suffered. The relationship was adversarial because the parties

had no working relationship and a history of lawsuits. Stanfield,

52 F.3d at 871–72. Here, there was no working relationship and

the contempt lawsuits centered on Lawn Managers violating the

MSA by competing for Progressive’s clients. See Maj. Op. 911–13.

30a

Likewise, the Ninth Circuit rejected a vineyard’s

licensing scheme where the “sole evidence” of the mark

holder’s quality control was random wine tastings and

reliance on the licensee’s reputation. Barcamerica, 289

F.3d at 596. Even though the wine tastings “perhaps

demonstrate a minimal effort to monitor quality,” id. at

597, the Ninth Circuit expected the mark holder “to

sample (or to have some designated wine connoisseur

sample) on an annual basis, in some organized way,

some adequate number of bottles of the Renaissance

wines which were to bear Barcamerica’s mark to ensure that they were of sufficient quality,” id. at 598. It

held that a mark holder with no “involvement whatsoever regarding the quality of the wine and maintaining

it at any level” engages in naked licensing. Id. at 597.

As the court points out, the Ninth Circuit’s decision in

FreecycleSunnyvale prohibited the licensor to rely on

the licensee because there was no close working relationship (and never had been) and the licensor failed

to show any other indicia of actual control. Maj. Op.

910-11 n.4. The Ninth Circuit explained that “[o]ther

circuits have also relied on the licensor’s confidence in

the licensee only where there were additional indicia

of control.” 626 F.3d at 519 n.7. I agree with our sister

circuits and would require Lawn Managers to show

some indicia of control.

III.

Because the mark has been abandoned due to naked licensing, I also address the claim that licensee

estoppel bars Progressive’s naked licensing defense.

31a

Lawn Managers argues that “a plaintiff-licensee is

estopped from contesting the validity of its licensor’s

marks,” citing Seven Up Bottling Company v. Seven Up

Co., 561 F.2d 1275 (8th Cir. 1977) (citing Heaton Distrib. Co. v. Union Tank Car Co., 387 F.2d 477, 482 (8th

Cir. 1967)). This court has been reluctant to apply licensee estoppel broadly. “Licensee estoppel precludes

only licensees of a mark from contesting it,” Sturgis

Motorcycle Rally, 908 F.3d 313, 321, (8th Cir. 2018), and

“covers only the mark that the licensee has agreed to

use,” id. at 322. I would follow this narrow view of

estoppel.

Our precedent establishes only that a current licensee cannot challenge the validity of a mark during

the life of the license. In Seven Up, we explained that

“the establishment of an existing licensor-licensee relationship between [licensor] and [licensee] effectively

constitutes an insuperable bar to recovery by [licensee]

with regard to its trademark claims.” 561 F.2d at 1279.

But there, the licensee “ha[d] established the existence

of a present and valid licensing agreement between

plaintiff and defendant.” Id. (emphasis added). Nor

does the Heaton decision’s statement that a licensee

“would be estopped to claim” a mark is invalid bind us.

387 F.2d at 482. There, the court merely enforced a nocontest provision against a licensee. Id. The court had

no occasion to decide if licensee estoppel applied “in the

absence of ” that provision. Id. As a result, the estoppel

statement is “unnecessary to the decision in the case

32a

and therefore not precedential.”9 Shephard v. United

States, 735 F.3d 797, 798 (8th Cir. 2013).

As Progressive did not challenge the license’s validity while using the mark, it is not barred from asserting a naked licensing defense to post-license

infringement claims. This defense is not inconsistent

with the license or Progressive’s recognition that in

2012 the mark held significance. Progressive should be

allowed to show that by 2015 there was no mark left to

protect, and therefore, it cannot be liable for post-license infringement. Especially where the license

caused consumer confusion, I would permit the licensee to assert a naked licensing defense against infringement claims arising after the license expired.10

***

Trademark law imposes an affirmative duty on

the licensor to police the goods and services offered to

the public under its mark. A licensor cannot shirk this

duty by relying on a past relationship with no way to

control quality. Because I would not approve a trademark license that worked a fraud on the public, I respectfully dissent.

The court even stated that its entire discussion, including

the estoppel statement, “is immaterial to the outcome of the case.”

See id. Accepting that as true, the statement is dicta.

Some courts even hold that naked licensing estops the

trademark owner from asserting rights to the mark. Barcamerica,

289 F.3d at 596 (9th Cir. 2002); Sheila’s Shine Prod., Inc. v. Sheila

Shine, Inc., 486 F.2d 114, 124 (5th Cir. 1973).

33a

APPENDIX B

LAWN MANAGERS, INC., Plaintiff,

PROGRESSIVE LAWN MANAGERS, INC.,

Defendant.

No. 4:16 CV 144 DDN

United States District Court,

E.D. Missouri, Eastern Division.

Signed 06/11/2018

Norah J. Ryan, Law Office of Norah J. Ryan, Susan

Nell Rowe, Rowe Law Office LLC, Annette P. Heller, St.

Louis, MO, for Plaintiff.

Don V. Kelly, Evans and Dixon, St. Louis, MO,

Kevin C. Roberts, Roberts and Wooten, LLC, Hillsboro,

MO, Alexander M. Hurst, Evans and Dixon, LLC, Columbia, MO, for Defendant.

MEMORANDUM OPINION

David D. Noce, UNITED STATES MAGISTRATE

JUDGE.

This case arises from a trademark dispute between plaintiff Lawn Managers, Inc., (“Lawn Managers”) and defendant Progressive Lawn Managers, Inc.,

(“Progressive”) over the latter’s use of the mark “Lawn

Managers.” Plaintiff alleges one count of trademark infringement under 15 U.S.C. § 1114, and defendant

34a

counterclaims for cancellation of trademark registration under 15 U.S.C. §§ 1115, 1119, and 1064.

The Court has subject matter jurisdiction over the

action, pursuant to 28 U.S.C. §§ 1331 and 1338 and 15

U.S.C. § 1121. The parties have consented to the exercise of plenary authority by a United States Magistrate

Judge pursuant to 28 U.S.C. § 636(c).

This action was tried to the Court sitting without

a jury from October 30 to November 1, 2017. After carefully considering the pleadings, trial testimony, exhibits, and the parties’ memoranda, the Court makes the

following findings of fact and conclusions of law pursuant to Federal Rule of Civil Procedure 52.

FINDINGS OF FACT

1. Plaintiff Lawn Managers is a lawn care business, incorporated in Missouri since 1981. Its principal,

holding 100% of its ownership, is Randall Zweifel.

2. Defendant Progressive is also a lawn care

business, incorporated in Missouri since 2012. Its principal, holding 100% of its ownership, is Linda Smith.

3. Randall Zweifel and Linda Smith were previously married; they divorced in 2012. Prior to their divorce, Zweifel and Smith each owned 50% of Lawn

Managers and its assets, including the trademark at

issue in this case. They worked together in this business for 17 years.

35a

4. Zweifel and Smith entered a marital settlement agreement, dated April 17, 2012, that was incorporated into the divorce decree issued by the Circuit

Court of Jefferson County, Missouri, on May 1, 2012.

This decree provided in pertinent part that Smith

would relinquish her share in plaintiff and establish a

new company named “Progressive Lawn Managers.” In

return, Smith would receive a license to use the name

“Lawn Managers” for two years, as well as some of

plaintiff ’s assets, including some vehicles and lawn

equipment and the ability to temporarily use plaintiff ’s facilities and credit. All of plaintiff ’s assets not

specifically named were reserved to Zweifel, who assumed sole ownership of plaintiff.

5. The May 2012 divorce decree also provided

that plaintiff ’s residential customer lists were divided

by ZIP Code areas and awarded to each party. Zweifel

and Smith each agreed not to solicit residential or commercial account business in the areas awarded to the

other for two years. Id.

6. In October 2013, Zweifel and Smith filed crossmotions for contempt for unrelated violations of the divorce decree. They reached a settlement agreement in

July 2014, which was incorporated into a second judgment of the Jefferson County Circuit Court, issued

July 25, 2014. Among its terms, the 2014 Judgment extended defendant’s license to use plaintiff ’s trademark

until December 31, 2014. It further replaced the ZIP

Code area non-solicitation agreement with a two-year

non-compete agreement for residential customers, to

expire July 25, 2016.

36a

7. The 2014 Judgment expressly provided that

plaintiff and defendant were not enjoined from entering ZIP Code areas previously awarded to the other, so

long as such entry was for purposes of signing up or

servicing commercial customers, as opposed to residential ones. Thus, even as residential customers assigned

to defendant watched plaintiff ’s vehicles driving

through their neighborhoods, they were being told by

plaintiff ’s staff that “we can’t service your ZIP Code.”

The public was not immediately privy to the 2012 Decree or the 2014 Judgment and was not made aware of

their terms in phone calls with plaintiff ’s staff.

8. Between 2012 and December 31, 2014, defendant variously made use of “Lawn Managers” and “Progressive Lawn Managers” in assorted forms of

advertising, business materials, and representations

to third parties.

9. From 2012 to 2015, there was constant and obvious consumer confusion, due to the post-divorce proceedings and the resulting two-year license agreement.

The confusion manifested itself in phone calls to one

party meant for the other party and checks that had to

be hand-sorted to make sure they went to the correct

company.

10. Immediately prior to December 31, 2014, defendant Progressive’s signage and its website used a

logo design containing the words “Progressive Lawn

Managers,” with the word “Progressive” larger than

the words “Lawn Managers, Inc.”:

37a

11. From January 2015 onward, defendant used

a visual logo that, while it still contained the words

“Progressive Lawn Managers,” used very small font

size for the word “Progressive” to the left of the words

“Lawn Managers.” This small type was, moreover, superimposed on an image of grass underneath the St.

Louis Gateway Arch and was difficult to distinguish

from the image:

12. This logo was not devised solely for artistic or

esthetic reasons. In this regard, “Progressive” is the

one word responsible for distinguishing defendant’s

mark from plaintiff ’s, and the change was implemented simultaneously with the expiration of defendant’s license to use plaintiff ’s mark. Defendant did not

make a good-faith effort to dissipate confusion, but

acted to deliberately exacerbate any consumer confusion with the intent of profiting from plaintiff ’s accrued consumer goodwill for as long as possible.

13. On February 17, 2015, plaintiff registered

the word mark “Lawn Managers” with the United

States Patent and Trademark Office (“USPTO”). Plaintiff has used the name “Lawn Managers” in commerce

38a

since its incorporation in 1981. Prior to the divorce, on

November 14, 2011, plaintiff had registered the following logo:

14. In 2015, defendant advertised a $40 coupon

that, except for the phone number listed, was identical

to that used by plaintiff. The coupon used the name

“Lawn Managers.”

15. From 2015 onward, defendant used the logo

at issue on yard signs, consisting of 11×14-inch cardboard signs posted on stakes in customers’ yards after

lawn treatments. These signs were visible to passersby

on the street. However, given the signs’ size and the

distance from which passersby would view them, only

39a

the words “Lawn Managers” and not “Progressive”

would be reasonably legible.

16. In a letter dated November 23, 2015, plaintiff ’s counsel notified defendant that it considered defendant’s logo to infringe plaintiff ’s trademark of the

words “Lawn Managers,” stating that the small size of

the font and the placement within the image would

cause consumers to reasonably overlook the word “Progressive” and thus mistake “Progressive Lawn Managers” for “Lawn Managers.”

17. In December 2015, defendant’s counsel responded that it refused to change its logo, signage, or

business practices.

18. In February 2016, defendant returned to customers checks intended for plaintiff that had been mistakenly sent to defendant. The returned checks were

accompanied by company letterhead stationery that

referred to defendant as the “Home Office” and to

plaintiff as “the High Ridge location,” rather than conveying the truth that plaintiff and defendant were separate, competing companies.

19. Plaintiff began this federal lawsuit action on

February 4, 2016, alleging trademark infringement

arising out of defendant’s continued use of the aforementioned logo. Defendant Progressive counterclaimed for trademark cancellation.

20. Between January 2016 and October 2017,

when this case was tried, plaintiff received more than

140 phone calls that indicated substantial consumer

40a

confusion. These calls included customers calling one

company while trying to reach the other, calling the

wrong company with questions about their accounts,

and attempting to cancel service with the wrong company.

21. Until late 2017, defendant used an advertisement video on its website. This video used the visual

logo at issue and represented defendant as employing

more than 20 people, a number that did not reflect defendant’s actual employee records but that was comparable to the number of people employed prior to the

division of plaintiff and defendant. The video further

represented defendant as having been in business for

a number of years that was only possible if defendant

was, in fact, plaintiff.

22. Linda Smith, defendant’s principal, made no

effort to tell customers that plaintiff and defendant

were separate companies. Instead, she just told them

that she changed her business name.

23. From 2012 until the time of trial in October

2017, when plaintiff ’s crews serviced commercial property in defendant’s ZIP Code areas, they observed the

work being done by defendant’s crews and observed

and reported that the work performed by defendant’s

crews was consistent with plaintiff ’s standards. The

work crews employed by defendant had previously

been employed by plaintiff and made use of the same

procedures and equipment they had always used. They

did not communicate their observations to defendant

or make any effort to supervise defendant’s work.

41a

24. During the period between January 1, 2015,

and the time of trial in October 2017, defendant’s revenues were $2,036,830.00, with reasonably calculated

profits of $322,753.00. However, for the purpose of determining the amount of plaintiff ’s damages, the evidence is insufficient to allow the Court to distinguish

the effect of customer confusion occurring between

2012 and 2014 from that occurring after 2014.

25. The cost of corrective advertising will be

$71,346.00.

26. Since the 2012 divorce decree, and during the

pendency of this federal action, Smith and Zweifel

have been engaged in multiple, ongoing contempt proceedings related to their divorce.

CONCLUSIONS OF LAW

This case is an admixture of federal trademark

law, difficult personal relationships, and Missouri state

divorce law. In this context, the Court may interpret

the provisions of the parties’ principals’ 2012 divorce

decree and the 2014 judgment to resolve questions of

federal trademark law. See, e.g., McGraw-Hill Companies, Inc. v. Vanguard Index Tr., 139 F. Supp. 2d 544,

551 (S.D.N.Y. 2001); Benefit Concepts New York, Inc. v.

Benefit Concepts Sys., Inc., 1995 WL 133773, at *3

(S.D.N.Y. 1995). Where these provisions are unclear,

this Court applies Missouri contract law, because the

marital settlement agreement made between the principals of plaintiff and defendant itself provided it was

to be construed under Missouri law. Cf., LeKander v.

42a

Estate of LeKander, 345 S.W.3d 282, 286 (Mo. App.

2011). Missouri state law holds that marital settlement agreements are final once they are ratified by a

state court’s order. See Mo. Rev. Stat. § 452.330.5 (“A

court’s order as it affects distribution of marital property shall be a final order not subject to modification.”).

This federal Court is not the proper forum to relitigate

Smith’s and Zweifel’s divorce proceedings or otherwise

encroach on the state court’s jurisdiction over domestic

matters. See Elk Grove Unified Sch. Dist. v. Newdow,

542 U.S. 1, 13, 124 S.Ct. 2301, 159 L.Ed.2d 98 (2004)

(“[I]n general it is appropriate for the federal courts to

leave delicate issues of domestic relations to the state

courts.”).

However, “the presence of federal law issues must

always be a major consideration weighing against surrender [of federal jurisdiction].” Moses H. Cone Mem’l

Hosp. v. Mercury Constr. Corp., 460 U.S. 1, 26, 103 S.Ct.

927, 74 L.Ed.2d 765 (1983). The purpose of federal

trademark law is twofold: (1) “to protect the public so

it may be confident that, in purchasing a product bearing a particular trade-mark which it favorably knows,

it will get the product which it asks for and wants to

get” and (2) “where the owner of a trade-mark has

spent energy, time, and money in presenting to the

public the product, he is protected in his investment

from its misappropriation[.]” S. Rep. No. 79-1333, at 3

(1946).

Nothing in this Court’s decision purports to set

aside or alter the terms of the 2012 Decree and 2014

Judgment, but it may construe them in a manner

43a

consistent with both federal trademark law and the

apparent intent of the parties. See McGraw-Hill, 139

F. Supp. 2d at 551-52; Lekander, 345 S.W.3d at 286.

1. Progressive’s Counterclaim of Trademark

Cancellation

The Court first considers defendant’s counterclaim of trademark cancellation, which, if proved,

would negate plaintiff ’s claim outright. This Court previously declined to grant summary judgment for plaintiff on this issue, and now returns to consider it

through the better lens of trial evidence. This Court is

empowered by 15 U.S.C. § 1119 to determine the right

to registration or the right to the cancelation of a registration.

Defendant argues that by allowing it to do business as Lawn Managers for two years, and then indefinitely as Progressive Lawn Managers, plaintiff

abandoned its trademark under the theory of “naked

licensing.” The Lanham Act provides that a mark is

deemed abandoned “[w]hen any course of conduct by

the owner, including acts of omission as well as commission, causes the mark to become the generic name

for the goods or services on or in connection with which

it is used or otherwise to lose its significance as a

mark.” 15 U.S.C. § 1127. If a registered trademark is

abandoned, a court may cancel it. 15 U.S.C. § 1064.

Abandonment by naked licensing or “uncontrolled

licensing” occurs when a trademark owner grants a license to use its mark but “fails to control the quality of

44a

the products made by the licensee, thus permitting a

deception of the public.” Heaton Distrib. C. v. Union

Tank Car Co., 387 F.2d 477, 485 (8th Cir. 1967). Because abandonment results in a forfeiture of rights, defendant’s burden of proof is by “clear and convincing”

evidence. Cmty. of Christ Copyright Corp. v. Devon Park

Restoration Branch of Jesus Christ’s Church, 634 F.3d

1005, 1010 (8th Cir. 2011); 3 McCarthy on Trademarks

and Unfair Competition § 17:12 (5th ed. 2018).

Plaintiff ’s two-year license of its trademark to defendant, which allowed defendant to do business as

Lawn Managers, was not a naked license. The fact that

the underlying divorce decree and judgment contain no

dispositive. “A contractual provision giving the licensor

the right to supervise and control the nature and quality of the licensee’s goods and services is not an essential element if adequate quality control was in fact

exercised.” 3 McCarthy § 18:59.

In determining what amount of “adequate” quality

control plaintiff must have exerted to avoid defendant’s defense of abandonment, the Court considers

whether plaintiff “(1) [retained] express contractual

control over [defendant’s] quality control measures,

(2) [had] actual controls over [defendant’s] quality

control measures, and (3) was unreasonable in relying

on [defendant’s] quality control measures.” FreecycleSunnyvale v. Freecycle Network, 626 F.3d 509, 512

(9th Cir. 2010).

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No provision in the marital settlement agreement

gave plaintiff the right to control the nature and quality of defendant’s use of the mark. Nor did plaintiff actually control the nature and quality of defendant’s

services. Plaintiff ’s work crews observed the work

done by defendant’s work crews and found it complied

with plaintiff ’s standards. However, there is no indication in the record that plaintiff ’s work crews communicated their observations to defendant or made any

effort to supervise defendant’s work. Accordingly, the

Court concludes that plaintiff does not meet either of

the first two of the factors set out in Freecycle.

Plaintiff nonetheless prevails on the third factor

in Freecycle. When a licensor and licensee have had a

sufficiently close prior working relationship, and no actual decline in quality has been demonstrated, the licensor (plaintiff ) may reasonably rely on the licensee’s

(defendant’s) own efforts to ensure the quality of its

mark. In these cases, it “would depart from the purpose

of the law to find an abandonment simply for want of

all the inspection and control formalities.” Taco Cabana Intern., Inc. v. Two Pesos, Inc., 932 F.2d 1113, 1121

(5th Cir. 1991). Examples of such relationships include

Taco Cabana Intern., Inc. v. Two Pesos, Inc., 932 F.2d

1113 (8-year business association between two brothers); Transgo, Inc. v. Ajac Transmission Parts Corp., 768

F.2d 1001, 1017-18 (9th Cir. 1985) (10-year business association with licensee, for whom licensor manufactured 90% of components sold); and Taffy Original

Designs, Inc. v. Taffy’s, Inc., 1966 WL 7124, at *9 (N.D.

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Ill. 1966) (17-year business association between sisters).

The 17-year business relationship between

Zweifel and Smith was more than sufficient to give

plaintiff reasonable assurance of the quality of service

defendant would provide to customers. This is doubly

true given that the work crews employed by defendant

had previously been employed by plaintiff, they used

the same procedures and equipment they had always

used, and the quality of the service was consistent with

plaintiff ’s quality. Accordingly, there was no naked licensing, and defendant’s counterclaim of trademark

cancellation by abandonment fails.

2. Lawn Manager’s Claim of Trademark Infringement

Prevailing in a claim for trademark infringement

requires that a plaintiff prove “(1) that it owns a valid,

protectable mark, (2) that the defendant has used a

mark in commerce without the plaintiff ’s consent; and

(3) that there is a likelihood of confusion between the

plaintiff ’s mark and the defendant’s mark.” ZW USA,

Inc. v. PWD Sys., LLC, 208 F. Supp. 3d 1025, 1039 (E.D.

Mo. 2016).

(1)

Plaintiff owns a valid, protectable mark.

A trademark is established by the use of the mark

in commerce. 15 U.S.C. § 1127. It cannot be created absent such use save with a bona fide intention to make

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such use and a contemporaneous application for federal registration. Id. Plaintiff has a right to the wordmark “Lawn Managers.” At all times relevant to these

proceedings, it had every right to grant defendant a license to use this mark and to set an expiration date on

this license. Plaintiff does not own defendant’s trademark, “Progressive Lawn Managers,” and it has no

right to grant or rescind consent to the use of that

trademark. Still, defendant cannot use “Progressive

Lawn Managers” in any way that it chooses, if the manner of its use infringes plaintiff ’s own trademark.

(2)

After December 31, 2014, defendant used

plaintiff ’s mark in commerce without plaintiff ’s consent.

For the duration of defendant’s license, from May

2012 to December 2014, defendant was entitled to tell

customers and potential customers that its name was

Lawn Managers, Progressive Lawn Managers, or both.

And the evidence shows defendant did so. The representations made to customers and potential customers

prior to December 31, 2014, were done with plaintiff ’s

consent and therefore do not persuade that defendant

infringed.

Defendant’s license to use plaintiff ’s mark expired

on December 31, 2014. Accordingly, any use of the

mark “Lawn Managers” after December 31, 2014, or a

mark confusingly similar to it, was done without plaintiff ’s consent. In the November 2015 letter, plaintiff

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explicitly confirmed to defendant that plaintiff did not

consent to defendant using its mark.

(3)

There was a likelihood of confusion between

plaintiff ’s mark and defendant’s mark.

In determining whether a “likelihood of

confusion” exists, courts consider: (1) the

strength of the owner’s mark; (2) the similarity between the owner’s mark and the alleged

infringer’s mark; (3) the degree to which the

products compete with each other; (4) the alleged infringer’s intent to “pass off ” its goods

as those of the trademark owner; (5) incidents

of actual confusion; and (6) the type of product, its costs and conditions of purchase.

Co-Rect Prods., Inc. v. Marvy! Advertising Photography,

Inc., 780 F.2d 1324, 1330 (8th Cir. 1985) (citing

SquirtCo v. Seven-Up Company, 628 F.2d 1086, 1091

(8th Cir. 1980)). Applying each of these factors to this

case, the Court concludes the following.

(1) Plaintiff ’s Lawn Managers mark is of moderate strength, being descriptive with associated secondary meaning. Abercrombie & Fitch Co. v. Hunting

World, 537 F.2d 4, 9-10 (2nd Cir. 1976). Descriptive

marks are not generally eligible for trademark protection, but may develop secondary meaning with a showing that they have become associated in the consumer’s

mind with the product or service at hand. Five years’

continuous and exclusive use prior to application is

prima facie evidence of such a showing. Id.

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(2) The entirety of plaintiff ’s mark is contained

within defendant’s mark, distinguished only by defendant’s addition of the word “Progressive.” Defendant failed to distinguish its mark from plaintiff ’s in the

mind of the consumer, considering the size and placement of the word “Progressive.”

(3) The services represented by plaintiff ’s and

defendant’s marks compete with one another directly

within the same market.

(4) Defendant intended to pass off its services as

those of plaintiff.

(5) Substantial evidence of actual consumer confusion was presented at trial.

(6) The services provided by both parties are essentially identical in type, costs, and conditions of purchase.

Taken together, the SquirtCo factors weigh in favor of plaintiff. The second and fourth factors weigh

most heavily in this Court’s assessment. In reaching

this conclusion, the Court finds that the following

pieces of evidence most strongly support an inference

that defendant intended to pass off its services as those

of plaintiff.

Prior to December 31, 2014, defendant’s trademark was presented in a “Progressive"-centric logo, but

as the December 31 deadline approached, defendant

redesigned its logo in a way that substantially minimized the word “Progressive.” This discredits defendant’s argument that the logo was changed solely for

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artistic reasons. Rather, the diminution of “Progressive,” the one word responsible for distinguishing defendant’s mark from plaintiff ’s, indicates deceptive

intent, particularly when the change was implemented

very near the expiration of defendant’s license to use

plaintiff ’s mark.

Defendant used a letterhead memo form in February 2016 to return checks intended for plaintiff that

had been mistakenly sent to defendant. This form referred to defendant as the “Home Office” and to plaintiff as “the High Ridge location.” The use of “Home

Office” and “the High Ridge location” clearly suggests

that the latter is a branch or subsidiary of the former,

rather than conveying the truth that plaintiff and defendant were separate, competing companies.

Defendant’s principal Smith testified that she

made no effort to tell customers that plaintiff and defendant are separate companies. Instead, Smith testified that “I just tell them I’ve changed my name.” The

natural construction of this statement is that “I” refers

to Lawn Managers and that therefore Lawn Managers

has changed its name to Progressive Lawn Managers.

As discussed above, defendant had the right to do this

until January 2015; it had no right to continue the

practice thereafter.

Plaintiff received more than 140 phone calls between January 2016 and the time of trial that were indicative of substantial consumer confusion. They

included customers calling one company while trying

to reach the other, calling the wrong company with

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questions about their account, and attempting to cancel service with the wrong company.

Until late 2017, defendant advertised with a video

using the infringing logo that represented defendant

as employing more than 20 people, a number that did

not reflect defendant’s actual employee records but

that was comparable to the number of people employed

prior to the division of plaintiff and defendant. The

video further represented defendant as having been in

business for a number of years that was only possible

if defendant was, in fact, plaintiff.

In addition to these factors, the Court considers

that defendant did not enter the market for the first

time as Progressive, but its principal was a former

owner of Lawn Managers who had permission for some

time to operate as Lawn Managers or Progressive. Defendant argues that the parties’ prior relationship, and

not an infringing mark, was the source of customer

confusion. But evidence of actual confusion before January 2015 does not preclude this Court’s conclusion

that defendant infringed plaintiff ’s trademark after

January 1, 2015. See, e.g., L & L Wings, Inc. v. MarcoDestin, Inc., 676 F. Supp. 2d 179, 188 (S.D.N.Y. 2009)

(“When an ex-licensee continues to use a mark after its

license expires, likelihood of confusion is established as

a matter of law . . . because consumers have already

associated the formerly licensed infringer with the

trademark owner.”).

Because defendant was granted a license to do

business as Lawn Managers, consumer goodwill

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arising out of defendant’s services accrued largely to

Lawn Managers rather than to defendant. And there

is substantial evidence of actual consumer confusion

as a result of this two-year license. Defendant argues

that “it is unreasonable to expect that that confusion

would simply dissipate overnight once Defendant’s

rights to use the ‘Lawn Managers’ name terminated.”

(Doc. 117 at 94). It is not unreasonable, however, to expect that defendant would make a good-faith effort to

dissipate confusion. Defendant did not make that effort. To the contrary, defendant deliberately exacerbated any consumer confusion with the intent of

profiting from plaintiff ’s accrued consumer goodwill

for as long as possible. Defendant’s actions following

the expiration of its license infringed plaintiff ’s trademark.

3. Relief

Plaintiff seeks injunctive relief and damages under the Lanham Act. A showing of likelihood of confusion entitles the owner of the mark to injunctive relief,

while a showing of actual confusion and willful infringement entitles the owner to damages. See Masters

v. UHS of Delaware, Inc., 631 F.3d 464, 471 n.2 (8th Cir.

2011); Co-Rect Products, 780 F.2d at 1330. Both have

been shown here. In calculating damages, a victorious

plaintiff may claim “(1) defendant’s profits, (2) any

damages sustained by the plaintiff, and (3) the costs of

the action.” 15 U.S.C. § 1117(a). Plaintiff must prove

only defendant’s sales, while defendant must prove

any claimed deductions. In other words, “[t]he

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defendant bears the burden in calculating profits of

proving any operating costs to be deducted from sales

revenue it realized during the period of trademark infringement.” Tonka Corp. v. Tonk-A-Phone, Inc., 805

F.2d 793, 794 (8th Cir. 1986); see also 15 U.S.C.

§ 1117(a). If “the court shall find that the amount of the

recovery based on profits is either inadequate or excessive the court may in its discretion enter judgment for

such sum as the court shall find to be just, according to

the circumstances of the case.” 15 U.S.C. § 1117(a).

The Court previously stated it would consider defendant’s unclean hands defense when assessing damages. Defendant claims that plaintiff ’s advertisement

to customers in plaintiff ’s ZIP Code areas in July 2016

sullied plaintiff ’s hands in this suit. Under Missouri

law, the protection of customer accounts, lists, or relationships is assumed to be limited in duration, unless

a party demonstrates “unequivocally” that both parties

intended it to run perpetually. See, e.g., Armstrong Bus.

Servs., Inc. v. H & R Block, 96 S.W.3d 867, 875 (Mo. Ct.

App. 2002). Rather than any such indicator of perpetual intent, both the 2012 divorce decree and the 2014

Judgment expressly limited the non-solicitation and

non-compete provisions to a term of years. Accordingly,

plaintiff was entitled to renew advertising to customers following the expiration of the 2014 Judgment’s

non-compete provision in July 2016, and this advertisement did not sully plaintiff ’s hands in a suit for

trademark infringement. Defendant produced no other

evidence to support a finding that plaintiff acted inequitably toward it as to the trademark at issue.

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Defendant also argues that the Court must apportion the profits to reflect only those caused by the use

of the infringing mark. However, plaintiff has proven

that apportionment is inherently impossible in this

case. See Hamilton-Brown Shoe Co. v. Wolf Bros. & Co.,

240 U.S. 251, 261-62, 36 S.Ct. 269, 60 L.Ed. 629 (1916).

The same evidence shows that the damage to consumers’ ability to differentiate between plaintiff and defendant was already done by the date infringement

began. While this does not support defendant’s contention that there was no infringement, it does make it

difficult to trace causation from confused consumers to

an infringing act of defendant instead of to plaintiff ’s

two-year license.

Substantial consumer confusion arose from plaintiff ’s two-year license agreement with defendant. The

terms of the marital settlement agreement expressly

provided defendant the right to use “Lawn Managers”

or “Progressive Lawn Managers” interchangeably at

defendant’s sole discretion. Defendant could and did

hold itself out to the public as plaintiff, with plaintiff ’s

consent, until December 31, 2014.

Despite the division of residential customers by

ZIP Code areas, plaintiff and defendant maintained

the right to enter one another’s ZIP Code areas for purposes of servicing commercial customers. The public

was not immediately privy to the 2012 Decree or the

2014 Judgment and was not made aware of their

terms in phone calls with plaintiff ’s staff. Thus, even

as residential customers assigned to defendant

watched plaintiff ’s vehicles driving through their

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neighborhoods, they were being told by plaintiff ’s staff

that “we can’t service your ZIP Code.”

Plaintiff ’s principal and staff testified that there

was “constant” and “obvious” consumer confusion from

2012 through 2014, and plaintiff ’s counsel conceded

the existence of extensive consumer confusion prior to

2015 arising directly out of the post-divorce proceedings and resulting two-year license agreement.

Plaintiff ’s expert witness testified that the information available was not sufficient to differentiate the

effects of confusion occurring before January 2015

from those occurring after for purposes of calculating

damages.

After carefully reviewing the expert reports, defendant’s tax returns, and defendant’s financial statements, the Court has determined that defendant’s

profits from 2015-2017 were $322,753.00. Defendant

has not submitted credible evidence supporting its

claim that the profits should be reduced. See H-D Michigan Inc. v. Biker’s Dream Inc., 1998 WL 697898, at *610 (C.D. Cal. 1998) (holding when deduction data is “incomplete and contradictory,” guessing is not appropriate and the court will find the infringer failed to prove

cost deductions); New York Racing Ass’n v. Stroup

News Agency Corp., 920 F. Supp. 295, 301 (N.D.N.Y.

1996) (holding when the plaintiff proves gross sales

and the defendant fails to prove cost deductions, “then

the profits to which the plaintiff is entitled under the

Lanham Act are equal to the infringer’s gross sales”);

Aris Isotoner Inc. v. Dong Jin Trading Co., Inc., 1989

56a

WL 236526, *5 (S.D.N.Y. 1989) (“[T]he court may resolve any doubts against the defendant in calculating

profits, particularly if the uncertainty is due to the defendant’s inadequate recordkeeping or failure to produce documentary evidence.”).

But given the nature of the parties’ licensing

agreement between 2012 and 2014, a damages award

of $322,753.00 would be excessive. The degree of consumer confusion generated prior to 2015 was substantial and, ultimately, impossible to divide from that

perpetuated later by defendant’s willfully infringing

activity. Additionally, during the relevant period of

January 1, 2015, to July 25, 2016, the parties were under a non-compete agreement. The Court equitably accounts for the fact that the parties were not legally

competing for residential customers in several ZIP

Code areas for approximately half of the relevant profit

period. Thus, the residential account profits for that

time period cannot be traced to defendant’s infringement. Accordingly, considering the positions of the parties and the additional costs assessed as a result of

defendant’s infringing conduct, the Court awards

plaintiff compensatory damages of $80,688.00 (25% of

its claimed damages of $322,753.00), $71,346.00 for

corrective advertising, plus reasonable attorney fees,

the costs of the action, and injunctive relief.

An appropriate Judgment Order is filed herewith.

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APPENDIX C

UNITED STATES DISTRICT COURT

EASTERN DISTRICT OF MISSOURI

EASTERN DIVISION

LAWN MANAGERS, INC., )

)

Plaintiff,

)

No. 4:16 CV 144 DDN

)

PROGRESSIVE LAWN

)

MANAGERS, INC.,

)

Defendant.

)

SUPPLEMENTAL JUDGMENT ORDER

(Filed Jul. 13, 2018)

This action was tried to the Court sitting without

a jury, the undersigned United States Magistrate

Judge presiding by consent of the parties under 28

U.S.C. § 636(c)(3). The Court having rendered its findings of fact and conclusions of law in its Memorandum

Opinion, filed on June 11, 2018, and having ruled certain post judgment motions by Memorandum and Order filed herewith,

IT IS HEREBY ORDERED, ADJUDGED, AND

DECREED that Plaintiff Lawn Managers, Inc., have

and recover from Defendant Progressive Lawn Managers,

Inc., compensatory damages in the sum of $80,688.00,

plus the sum of $71,346.00 for corrective advertising,

plus post judgment interest thereon at the rate

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provided by 28 U.S.C. § 1961, plus reasonable attorneys’ fees and the costs of the action.

IT IS FURTHER ORDERED, ADJUDGED,

AND DECREED as follows:

1. Defendant Progressive Lawn Managers, Inc.,

and its principals, officers, agents, and employees (collectively “Defendant”) is PERMANENTLY ENJOINED from using plaintiff ’s trademark “Lawn

Managers” in connection with the marketing or operation of defendant’s business. Defendant’s use of its own

trademark, “Progressive Lawn Managers,” must comply with the following terms:

The word “Progressive” must be of a

larger font size than that used by the

words “Lawn Managers.”

If defendant continues to use the name

“Progressive Lawn Managers," these

words must be contiguous, each word being of the same font and the word “Progressive” being of a font size at least twice

as large as that of the words “Lawn Managers;” and

No word may be placed inside a graphic

or otherwise separated from the other

words.

Defendant must not represent to the

public that it had been in business prior

to 2012. Defendant may represent to the

public Linda Smith’s years of experience

with the industry, but must do so with the

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construction “__ years’ experience” rather

than “__ years in business” or “in business

since 19__.”

If Defendant ceases to use the word

“Managers” in its trademark, it is not prohibited from using “Lawn” or the word

“Progressive” or either of them.

2. Defendant must replace all signage currently

in use that does not comply with the terms listed

above.

3. Defendant must issue a written notice letter

to all of its current and former customers of the period

January 1, 2015, to the date of this Judgment Order.

This letter must prominently display the following

terms:

Plaintiff and defendant are separate,

competing companies. Defendant’s CEO

and staff were formerly affiliated with

plaintiff until 2012, whereupon they separately incorporated as Progressive Lawn

Managers.

Correct and distinct contact information, including payment address, for

plaintiff.

Correct and distinct contact information, including payment address, for

defendant.

4. Defendant must notify any government

agency, domain name registrar, bank, business directory, telephone directory, listing company, advertising

60a

listing, and any other such entity that defendant has

used or provided contact information to since January

1, 2015, that it is no longer using the name “Lawn

Managers.” Defendant must direct each such entity to

change its records to reflect defendant’s correct name.

5. Defendant must relinquish ownership of the

URL “lawnmanagersinc.com.” Any additional domain

names or URLs under defendant’s control that use the

words “Lawn Managers” must also be relinquished, unless they are immediately preceded by the word “Progressive.” If abbreviated, such domain names or URLs

will also be relinquished unless the letters “LM” are

immediately preceded by the letter “P.”

6. Defendant must respond to telephone inquiries for “Lawn Managers” with correct and distinct contact information for plaintiff, including the fact that

plaintiff and defendant have been separate companies

since 2012. Plaintiff must likewise respond to telephone inquiries for “Progressive” or “Progressive Lawn

Managers.”

7. Within 30 days of the date of this Supplemental Judgment Order, Defendant must permanently

remove the advertising video previously located on its

“Contact Us” internet website plmi.us from any location on the internet where the video appears.

8. Counsel for defendant must report to the

Court in writing regarding the completion of the actions set forth above within 60 days of the entry of this

Supplemental Judgment Order.

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9. The Court shall retain jurisdiction over this

action to enforce this permanent injunction entered

against defendant Progressive.

10. Pursuant to 15 U.S.C. § 1116, the Clerk of the

Court will notify the Director of Patents and Trademarks of the entry of this final Supplemental Judgment Order, who will enter it upon the records of the

United States Patent and Trademark Office.

/s/ David D. Noce

UNITED STATES MAGISTRATE JUDGE

Signed on July 13, 2018.

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APPENDIX D

UNITED STATES COURT OF APPEALS

FOR THE EIGHTH CIRCUIT

No: 18-2658

Lawn Managers, Inc., a Missouri Corporation

Appellee

Progressive Lawn Managers, Inc.,

a Missouri Corporation

Appellant

Appeal from U.S. District Court for the

Eastern District of Missouri – St. Louis

(4:16-cv-00144-DDN)

ORDER

(Filed Jun. 29, 2020)

The petition for rehearing en banc is denied. The

petition for rehearing by the panel is also denied.

June 29, 2020

Order Entered at the Direction of the Court:

Clerk, U.S. Court of Appeals, Eighth Circuit.

/s/ Michael E. Gans

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APPENDIX E

Linda R. ZWEIFEL, n/k/a Linda R. Smith,

Respondent,

Randall ZWEIFEL, Appellant.

No. ED 107451

Missouri Court of Appeals,

Eastern District,

DIVISION ONE.

Filed: January 28, 2020

Motion for Rehearing and/or Transfer to

Supreme Court Denied March 9, 2020

Appeal from the Circuit Court of Jefferson County,

Hon. Antonio M. Manansala, Judge

ATTORNEYS FOR APPELLANT, Susan N. Rowe,

2117 Nebraska Ave., St. Louis, MO 63104, Norah J.

Ryan, 3407 South Jefferson, St. Louis, MO 63118.

ATTORNEYS FOR RESPONDENT, Kevin C.

Roberts, Jonathan W. Doss, P. O. Box 888, Hillsboro,

MO 63050.

ROBERT G. DOWD, JR., Judge.

Randall Zweifel appeals from the contempt judgment entered against him for conduct his ex-wife

Linda Smith claimed violated the dissolution judgments. We reverse.

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Background

Zweifel and Smith jointly owned and operated

Lawn Managers, Inc. during their marriage. The marriage dissolved, and the parties reached an agreement

regarding their business interests, among other things.

The parties’ Marital Settlement Agreement was incorporated into the dissolution judgment dated May 1,

2012 (collectively the agreement and judgment will

be referred to as “2012 MSA and Judgment”). Therein,

it was agreed that Smith would assign all of her shares

in the lawn care business to Zweifel, which would

continue under the name “Lawn Managers, Inc.,” and

Smith would establish a new lawn care company. In

Section 5.02, the parties divided the accounts and accounts receivable of the business. They were each

awarded certain commercial accounts and accounts receivable; Smith was “awarded all right, title, and interest in all residential accounts and accounts receivable

in the following zip codes,” and then 19 zip codes were

listed. Zweifel was similarly “awarded all right, title,

and interest in all residential accounts and accounts

receivable” in 54 zip codes.

In Section 5.06, the parties addressed “Development of New Business.” Therein, Smith agreed that

her new lawn care business would use the name “Progressive Lawn Managers, Inc., doing business as Lawn

Managers” for a period of no more than two years and

would thereafter stop using the name “Lawn Managers” and use only the name “Progressive Lawn Managers, Inc.” In that same section, the parties included a

non-solicitation agreement:

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For a period of two years from that date of dissolution of marriage [Smith] and her employees will

refrain from soliciting residential accounts and

commercial accounts in the zip codes that have

been awarded to [Zweifel] in Section 5.02(2)(b),

and [Zweifel] and his employees will refrain from

soliciting residential accounts and commercial accounts in the zip codes that have been awarded to

[Smith] in Section 5.02(2)(b). [Smith] and [Zweifel]

understand that the agreement to refrain from soliciting business in the zip codes awarded to the

other party includes business for lawn care services, fertilization, weed control, insect control,

and other types of lawn service.

There appears to never have been any dispute that

under the above terms of the 2012 MSA and Judgment,

the parties were: (1) each awarded a number of existing

commercial accounts and a number of existing residential accounts in identified zip codes and (2) each had

the exclusive right to solicit new commercial or residential accounts in those zip codes, at least for two

years. There was, however, disagreement as to the

meaning of “solicit” in Section 5.06. When residential

customers in Smith’s zip codes contacted Zweifel for

service, he began servicing them, claiming to believe

that because he did not “solicit” their business he was

not violating the 2012 Judgment. It appears that some

of those 72 customers he began servicing were existing

accounts awarded to Smith in Section 5.02 and some of

them were new accounts covered by the non-solicitation provision in Section 5.06.

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In October of 2013, Smith filed a motion for contempt, alleging that Zweifel solicited and serviced accounts that had been awarded to her in violation of

Section 5.02 and the non-solicitation provision of Section 5.06.1 Zweifel filed a cross-motion for contempt

alleging Smith was engaged in similar behavior. Ultimately, the parties reached an agreement settling the

issues in these motions on July 25, 2014. The terms of

that agreement were entered as the judgment of the

court (collectively this agreement and judgment will

be referred to as “2014 Settlement and Judgment”).

Therein, the parties agreed that “each may sign up and

service new commercial accounts wherever they may

be, regardless of zip code.” As to residential accounts,

the parties agreed as follows:

Parties agree that each of them shall NOT sign up

or service any new residential accounts in the zip

codes awarded to the other in [the 2012 MSA and

Judgment]. This non-compete agreement shall remain in effect for two years from today’s date and

is enacted in lieu of the prior non-solicitation

clause found in paragraph 5.06 of [the 2012 Judgment].2

Several months earlier, Zweifel was held in contempt of the

2012 MSA and Judgment, on Smith’s motion, for failing to make

a certain payment thereunder. He successfully purged himself of

that contempt by making the payment.

We note the two-year non-solicitation clause in Section 5.06

of the 2012 MSA and Judgment—which this non-compete was

said to replace—had actually already expired on May 1, 2014 by

its own terms.

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Zweifel also agreed to transfer to Smith “all of his existing residential customers” in two of the zip codes

that had been awarded to him in 2012, and these zip

codes were expressly covered by the non-competition

provision above. Otherwise, the parties agreed, “[a]ll

other terms of [the 2012 MSA and Judgment] shall remain in full force and effect.” It was also agreed that

Smith would stop using the name “Lawn Managers” on

December 31, 2014 and thereafter use only the name

“Progressive Lawn Managers, Inc.” for her business.

In February of 2016, Zweifel’s company filed a

trademark infringement claim in federal court, alleging that Smith’s company was continuing to use his

company’s name in violation of the parties’ agreement.

While that case was pending, the two-year non-compete in the 2014 Settlement and Judgment expired on

July 25, 2016. The parties agreed this meant that they

were no longer prohibited from signing up or servicing

new residential customers in the other’s zip codes. But

it became evident that they disagreed about whether

they could also begin to compete for the existing residential accounts that had been awarded to the other

party. It appears Zweifel believed that once the nonsolicitation and non-compete expired, all customers

were fair game and he sent a “We Want You Back” letter to customer accounts that had been awarded to

Smith. It appears Smith disagreed, and believed there

was a permanent non-compete on the existing customer accounts each was awarded. She asserted an affirmative defense of unclean hands in the federal

trademark infringement case based on the “We Want

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You Back” letter and Zweifel’s continued service of the

72 residential customers that contacted him years earlier. Smith also filed another motion for contempt in

state court and a separate request for injunctive relief

based on that conduct.

The state court issued a temporary restraining order prohibiting Zweifel from contacting, soliciting or

providing services to “any of the customers and/or accounts awarded to [Smith]” in either 2012 or 2014. On

Zweifel’s motion to clarify, the TRO was modified to

provide that Zweifel was permitted to respond to a specific list of customers who contacted him after the “We

Want You Back” letter by notifying them that he could

not service their accounts at this time and could not

discuss the matter further. The TRO, as modified, was

converted to a preliminary injunction on November 18,

2016, after a hearing.

Smith then amended her latest motion for contempt in October of 2017. Zweifel asserted affirmative

defenses, one of which was that any claims in this motion for contempt relating to his continued servicing of

the 72 customers were precluded under principles of

res judicata because they were previously fully adjudicated in the proceedings to resolve the parties’ earlier

cross-motions for contempt, which resulted in the 2014

Settlement and Judgment. Zweifel also filed counterclaims for, among other things, damages based on improvidently granted injunctive relief. A bench trial was

held over the course of several days in February, March

and April of 2018.

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Shortly after the contempt trial ended in state

court but before a decision was reached, the federal

court ruled on the trademark infringement case. It entered judgment finding that Smith had infringed by

using the “Lawn Managers” name and, in assessing

damages, concluded that Zweifel did not have unclean

hands because the non-competition provision had expired by the time he sent the “We Want You Back” letter. Zweifel sought to have the state court reopen the

evidence in the contempt case, arguing that this federal judgment must be given collateral estoppel effect

and precluded the state court from finding him in contempt for conduct the federal court found was permissible. That motion to reopen was denied.

In November of 2018, the court entered the judgment that is now on appeal, granting the amended motion for contempt and denying all defenses and

counterclaims. It concluded that Section 5.02 of the

2012 MSA and Judgment—dividing the commercial

and residential accounts and accounts receivable—was

a division of business assets, which like any division of

marital property, is “not subject to modification.” The

court concluded that the parties have and “will continue to have, in perpetuity, a property interest” in the

customer accounts awarded to each of them in 2012

and 2014. The court found the 2012 MSA and Judgment and the 2014 Settlement and Judgment obligated Zweifel “to only service zip code accounts that

were awarded as property to [him] . . . and not to service zip code accounts awarded as property to [Smith].”

The non-solicitation and non-competition provisions

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therein, it concluded, applied only to “new business”

and not the customer accounts awarded in the division

of property. Once those provisions expired, the court

found, the parties were permitted to solicit new business in any zip code, but could not “solicit the customer

accounts awarded to the parties” in 2012 and 2014.

Thus, the court held Zweifel in contempt for servicing

existing residential accounts in Smith’s zip codes and

soliciting Smith’s existing residential accounts with

the “We Want You Back” letter—all in violation of the

2012 MSA and Judgment and the 2014 Settlement and

Judgment. The court also found that since 2014,

Zweifel solicited, signed up and serviced new residential accounts in zip codes awarded to Smith in violation

of the non-compete in the 2014 Settlement and Judgment. The court found Zweifel’s conduct to be intentional and contumacious. The court ordered him to pay

Smith damages in the amount of $415,381.72, based

on her lost profits, and attorney fees. This appeal follows.

Scope of Appeal

Zweifel raises six points of error in which he challenges various aspects of the contempt judgment on

different theories. We note at the outset that this appeal does not involve commercial accounts, as all of the

conduct the court held was contemptuous related to

residential customers. It does not involve Zweifel’s conduct with respect to new residential accounts: Zweifel

has not raised any point on appeal challenging the

court’s finding that while the non-compete in the 2014

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Settlement and Judgment was in effect, he solicited,

signed up and serviced new residential customers in

Smith’s zip codes. Rather, all of the issues on appeal

relate solely to Zweifel’s soliciting and servicing of residential customer accounts that existed at the time of

the dissolution and were awarded to Smith.

In his first point on appeal, Zweifel contends the

federal trademark judgment was a conclusive determination that he was permitted to send the “We Want You

Back” letter to the Smith’s customers after the expiration of the two-year non-compete in the 2014 Settlement and Judgment, which he claims is dispositive of

the issue of whether Smith had a permanent non-compete as to those customers and whether sending the

letter violated such a provision. In his fourth point on

appeal, he similarly contends that any claims regarding his servicing of the 72 customers who came to him

had been fully and conclusively resolved in his favor by

the 2014 Settlement and Judgment and could not be

relitigated in this later motion for contempt. In essence, Zweifel asserts that these two previous adjudications are dispositive of the issues and claims here

and require a finding by this Court that his conduct in

sending the letter and servicing those 72 customer accounts did not violate the 2012 MSA and Judgment or

the 2014 Settlement and Judgment. We disagree that

such a definitive finding of “no contempt” is appropriate here. Rather, we agree with Zweifel’s alternative

basis for reversal, set out in his second point on appeal:

that the provision of the 2012 MSA and Judgment and

the 2014 Settlement and Judgment are too vague and

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indefinite as to his obligations regarding the existing

customer accounts awarded to Smith for him to be held

in contempt thereof. Granting the second point on appeal, renders his third and fifth points on appeal moot.

In his sixth and final point on appeal, Zweifel argues

that if we reverse, we must also deem the preliminary

injunction to have been improvidently granted, which

we do not believe is warranted here.

Discussion

We take the points on appeal somewhat out of order, beginning with the preclusive effect of certain

prior judgments on the issues and claims in this matter. The underlying question as to whether an issue is

barred by a prior judgment is a question of law. See

Bresnahan v. May Department Stores Company 726

S.W.2d 327, 329 (Mo. banc 1987). Otherwise, our review

of the contempt judgment is the same as in any courttried matter: we will affirm a civil contempt judgment

unless there is no substantial evidence to support the

decision, the decision is against the weight of the evidence or the decision erroneously declares or applies

the law. Wuebbeling v. Wuebbeling, 574 S.W.3d 317, 327

(Mo. App. E.D. 2019). “Further, this Court will not reverse the trial court’s ruling on a civil contempt motion

absent a clear abuse of discretion.” Id.

Preclusion

Zweifel contends the judgment entered in his company’s federal trademark infringement case against

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Smith’s company conclusively determined the meaning of the 2012 MSA and Judgment and the 2014 Settlement and Judgment and precluded a different

finding about the obligations thereunder by the trial

court in this contempt case.3 The claim of infringement

in the federal case was based on Smith’s continued

use of Zweifel’s company name.4 Smith asserted the affirmative defense of unclean hands, claiming that

Zweifel’s solicitation of customers in her zip codes in

July of 2016—namely, sending the “We Want You Back”

letter—was a violation of the 2014 non-compete and

should bar his trademark infringement claim. In its

judgment, the federal court addressed the unclean

hands defense only in the context of assessing damages:

The Court previously stated it would consider

[Smith’s] unclean hands defense when assessing

Smith notes that Zweifel moved this Court on appeal to

suspend the briefing schedule while the federal court’s judgment

is pending on appeal, raising the same collateral estoppel arguments raised in this point. We denied that motion without explanation and do not consider that denial to be determinative of the

merits of whether the federal judgment has a preclusive effect on

this issue.

The record before us regarding the federal trademark case

consists solely of the federal court’s judgment and memorandum

opinion and the proposed findings and conclusions submitted to

the federal court by both parties in that case. The appendix to

Smith’s brief contains additional pleadings purportedly filed in

that case, but those documents are not part of the record in this

appeal and are not made part of the record simply by including

them in the appendix. We do not consider documents in an appendix that are not in the record on appeal. Washington v. Blackburn,

286 S.W.3d 818, 822 (Mo. App. E.D. 2009).

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damages. [Smith] claims that [Zweifel’s] advertisement to customers in [her] zip code areas in

July 2016 sullied [his] hands in this suit. Under

Missouri law, the protection of customer accounts,

lists, or relationships is assumed to be limited in

duration, unless a party demonstrates “unequivocally” that both parties intended it to run perpetually. See, e.g., Armstrong Business Services, Inc. v.

H & R Block, 96 S.W.3d 867, 875 (Mo. App. W.D.

2002). Rather than any such indicator of perpetual

intent, both the 2012 [MSA and Judgment] and

the 2014 [Settlement and] Judgment expressly

limited the non-solicitation and non-compete provisions to a term of years. Accordingly, [Zweifel]

was entitled to renew advertising to customers following the expiration of the 2014 [Settlement and]

Judgment’s non-compete provision in July 2016,

and this advertisement did not sully [his] hands in

a suit for trademark infringement. [Smith] produced no other evidence to support a finding that

[Zweifel] acted inequitably toward it as to the

trademark at issue.

Collateral estoppel—or issue preclusion, as it is

known in modern terms—precludes the same parties

(or those in privity with them) from re-litigating an issue that was previously adjudicated. U-Haul Company

of Missouri v. Carter, 567 S.W.3d 680, 684-85 (Mo. App.

W.D. 2019). For collateral estoppel to apply, the prior

action must have necessarily and unambiguously resolved the same question presented in the second proceeding. Id. at 685; see also Trow v. Worley 40 S.W.3d

417, 422 (Mo App. S.D. 2001). The overriding factor is

a consideration of whether it would be fair to apply

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collateral estoppel in this particular case. James v.

Paul, 49 S.W.3d 678, 688 (Mo. banc 2001). The analysis

must focus primarily on principles of equity derived

from the facts of each case, and collateral estoppel will

not be applied where to do so would be inequitable. Id.;

see also Wilkes v. St. Paul Fire and Marine Insurance

Company, 92 S.W.3d 116, 123 (Mo. App. E.D. 2002).

It would not be fair to apply collateral estoppel in

this case. The contempt and trademark infringement

cases were proceeding simultaneously, and both the

federal and the state court took pains to ensure that

nothing they did in one case improperly impacted the

other. The federal court found it was permitted to interpret the provisions of the 2012 MSA and Judgment

and the 2014 Settlement and Judgment, stating it was

doing so under principles of Missouri contract law and

consistently with federal trademark law and the parties’ intentions. But, it also expressly stated that it

was “not the proper forum to re-litigate Smith’s and

Zweifel’s divorce proceedings or otherwise encroach

on the state court’s jurisdiction over domestic matters”

and that “nothing in this Court’s decision purports to

set aside or alter” the terms of the 2012 MSA and Judgment and the 2014 Settlement and Judgment. Likewise, the state court in the contempt case stated—in

its denial of the motion to reopen evidence and in its

final judgment in this case—that “[n]othing in this

Court’s decision purports to set aside or alter” the federal court’s judgment.

Moreover, the federal court did not assess Zweifel’s

conduct in the context of whether it was contemptuous.

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As discussed in greater detail later in this opinion, one

cannot be held in contempt of a court order unless that

order is “so definite and specific as to leave no reasonable basis for doubt of its meaning.” Wuebbeling, 574

S.W.3d at 327-28. The federal court did not analyze the

2012 MSA and Judgment and the 2014 Settlement and

Judgment under this strict standard and therefore

the conclusions that court drew about the provisions

therein—and whether Zweifel’s conduct was permitted

thereunder—do not unambiguously answer the identical question presented to the contempt court. Fairness

dictates that those conclusions should not supplant the

state court’s examination of what precisely was prohibited in that court’s judgments and whether Zweifel was

in contempt. Under these circumstances, it would be

inequitable for us to give the federal judgment preclusive effect and hold that it is dispositive of whether the

2012 MSA and Judgment and the 2014 Settlement and

Judgment permitted sending the “We Want You Back”

letter.

Point I is denied.

In a similar argument, Zweifel contends Smith

should have been barred under the doctrine of res judicata (also known as claim preclusion) from re-litigating

claims relating to the 72 customers who he began

servicing after 2012 when they approached him. He

contends all such claims were resolved by the 2014 Settlement and Judgment reflecting resolution of their

2013 cross-motions for contempt. Of course, those earlier proceedings addressed only the conduct that occurred prior to the 2014 Settlement and Judgment; the

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current motion for contempt alleged that he continued

servicing those 72 customers after the 2014 Settlement

and Judgment. Zweifel’s argument as to why Smith is

precluded from litigating these claims is difficult to follow, but appears to be premised on the notion that he

somehow was awarded those 72 customer accounts

during the proceedings on those 2013 cross motions

for contempt. He claims to have “already had” those 72

customer accounts at the time the parties settled those

motions and by virtue of that settlement, Smith agreed

she had been fully compensated for any claim relating

to those customers. Thus, the argument continues, he

was not violating the 2014 Settlement and Judgment

when he continued to service the “accounts that he

had” at that time and “retained after that date.”

Zweifel has pointed to nothing in the record that indicates these 72 customers became Zweifel’s property at

any point—prior to, during or after the 2014 Settlement and Judgment—and the argument based on that

unsupported factual assertion is therefore without

merit.

Point IV is denied.

Contempt

Alternative to his argument that the above judgments compel the conclusion that Zweifel’s conduct

was permissible under the 2012 MSA and Judgment

and the 2014 Settlement and Judgment, he contends

his conduct was not clearly and unambiguously prohibited thereunder and thus he could not be held in

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contempt of those judgments. We agree that there was

no explicit directive in the 2012 MSA and Judgment

and the 2014 Settlement and Judgment regarding the

parties’ obligations with respect to existing residential

customers, which required the trial court to find a prohibition of Zweifel’s conduct by implication. The court

did not have authority to hold him contempt under

these circumstances.

“Contempt is available only where a party has

been ordered to perform or not to perform a specific act

and yet refuses to do so.” State ex rel. Euclid Plaza

Associates, L.L.C. v. Mason, 81 S.W.3d 573, 577 (Mo.

App. E.D. 2002). Our Court recently reiterated the limitations on a court’s authority to hold a party in contempt of a court order, concluding that “clarity in the

order itself is essential so the process may comport

with fundamental principles of fairness”:

To support a charge of contempt for disobedience

of a judgment, decree or order, the court’s pronouncement may not be expanded by implication

in the contempt proceeding and must be so definite and specific as to leave no reasonable basis for

doubt of its meaning. Before a court may impose

sanctions on a party for disobeying a court order,

the order itself must precisely advise the individual of what conduct is forbidden.

Wuebbeling, 574 S.W.3d at 328 (internal quotation

marks and citations omitted). Thus, the finding of contempt must be predicated on a clear, unambiguous and

express directive of the court explicitly mandating or

prohibiting the conduct at issue. See id. at 328-29. If

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the provision on which the contempt court relies is too

vague, any mandate for or prohibition against the conduct at issue could only be found by implication. See id.

at 328-30. Expanding an earlier pronouncement by implication exceeds the court’s authority in a contempt

proceeding, and a contempt judgment that relies on

such an implication must be reversed. See id.; see also

Missouri Hospital Association v. Air Conservation

Commission, 900 S.W.2d 263, 267 (Mo. App. W.D. 1995).

Here, Zweifel does not challenge the court’s findings regarding the conduct he engaged in—namely,

that he solicited and serviced existing residential accounts awarded to Smith in 2012 and 2014—only the

conclusion that this conduct violated a clear and unambiguous provision of either of those judgments. According to the trial court, the parties were forever

prohibited from soliciting or servicing those accounts.

The court’s conclusion that such a prohibition existed

appears to have been derived from a series of inferences drawn from the actual language of the judgment.

The court began by finding the existing residential

customer accounts were business assets and were

properly divided as marital property in Section 5.02 of

the 2012 MSA and Judgment. Therefore, like any

other division of property, the court found it was not

subject to modification. It appears the court then concluded that the non-modifiable nature of a division of

marital property equated to the parties having “in perpetuity, a property interest” in the accounts they were

awarded. The court also construed the two-year nonsolicitation provision in the 2012 MSA and Judgment

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as applicable only to “new business,” and noted that

the two-year non-compete in the 2014 Settlement and

Judgment was expressly applicable only to new accounts. The court then seems to have implied—from

both the perpetual property interest and its conclusion

that the two-year non-solicitation and non-competition

provisions only applied to new business—that there

was a permanent ban on the parties’ ability to ever

compete for each other’s existing customer accounts.

None of the provisions relied on by the court to

reach this conclusion contain a clear, unambiguous and

express directive that explicitly and permanently prohibits solicitation and servicing of the existing residential accounts awarded to the other party. In Section

5.02 in the 2012 MSA and Judgment, the parties

agreed to give each other “all right, title and interest”

in certain customer accounts. Even assuming “customer accounts” have value and are capable of division

like other business assets, that fact does not necessarily mean that they must be treated like other business assets for all intents and purposes. Contrary to

Smith’s claim that the division of accounts is analogous to the division of the lawn care company’s vehicles, it is at least arguable that there are fundamental

differences between an award of an inanimate object

like a truck and an award of customer account, which

necessarily involved a relationship with another person. An award of a business asset like a truck may be

permanent in the sense that the other party would be

forever barred from taking it back, but it is at least

reasonable to doubt that the same is true with an

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award of a business relationship. A truck, of course,

has no interest in or ability to decide who owns it, but

the customers whose accounts were awarded to these

parties do have an interest in who services their

lawns—an interest recognized by the court when it

found that the 2012 MSA and Judgment did not prohibit the customers awarded to Smith and Zweifel from

seeking out lawn care services from companies other

than the parties’ companies. In short, there is a reasonable basis to doubt what was meant by the award of

these accounts in Section 5.02 and whether it included

a perpetual property interest to the parties in the existing customer accounts and an attending permanent

ban on efforts to regain those customer’s business.

Smith cites a provision in the 2012 MSA and Judgment in which the parties agreed that if either of them

“wishes to sell” any of the accounts referenced in Section 5.02, they “will give the other party the first opportunity to purchase the accounts that are up for

sale.” She then asks why such a provision would be included if the parties did not intend to have a perpetual

property interest in the accounts awarded to them in

Section 5.02. She also cites to an administrative provision of the 2012 MSA and Judgment containing the following language: “This Agreement shall be binding on

the heirs, representatives, and assigns of the parties

except as to the specific paragraphs that contain provisions for termination of obligations on the death of

either party.” And, again, she asks why such a provision would be included if the parties did not intend to

have a property right over the accounts awarded to

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them in perpetuity in Section 5.02. Beyond positing the

questions, Smith has not demonstrated that these provisions contain a clear and unambiguous permanent

prohibition on competition with the existing residential customer accounts awarded to each party in Section 5.02

Likewise, there is considerable reason to doubt

that by expressly imposing a two-year ban on solicitation and competition for new accounts in the 2012 MSA

and Judgment and the 2014 Settlement and Judgment, there was an intent to impose a permanent ban

on such conduct with respect to the existing accounts

awarded to each other. One simply does not necessarily

follow from the other. If the non-solicitation and noncompete only apply to new customers, then it is at least

arguable that rather than implying a permanent ban

on competing for existing customer, there was no such

ban on competition for those customers at any point. If

there was never any such restriction, then one could

argue that the day after the customers were divided

in Section 5.02 of the 2012 MSA and Judgment, the

parties were entitled to immediately compete for their

business. As much as there is reason to doubt the existence of a permanent ban on competition for these

accounts, there would be equal reason to doubt that

no ban existed either. Neither of these extremes—both

of which are possible under the trial court’s interpretation—is supported by the actual language in the

2012 MSA and Judgment or the 2014 Settlement and

Judgment. Because the judgments do not clearly and

unambiguously set forth any particular directive with

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respect to one party’s conduct with the existing customer accounts awarded to the other, the court’s permanent prohibition on competition with those customers

was imposed by implication. It was impermissible to

hold Zweifel in contempt of that implied provision. See

Wuebbeling, 574 S.W.3d at 328.

Importantly, we note that we are not tasked in this

appeal with clarifying any of the doubts discussed

herein. Nor should anything in the above discussion be

taken as a dispositive conclusion about the actual

meaning of the 2012 MSA and Judgment or the 2014

Settlement and Judgment. Rather, we are faced with a

much narrower question in determining the propriety

of this contempt judgment: whether the provisions of

the 2012 MSA and Judgment or the 2014 Settlement

and Judgment were specific and definite enough such

that Zweifel could be held in contempt thereof. Our

conclusion on that question is that they were not and

therefore it was error to hold him in contempt for soliciting and servicing the existing residential accounts

awarded to Smith. In other words, we do not conclude

that Zweifel’s conduct was permissible under the 2012

MSA and Judgment or the 2014 Settlement and Judgment—only that the judgments are too vague for the

trial court to have determined that the conduct was

contemptuous.

Point II is granted. The judgment must be reversed to the extent it holds Zweifel in contempt for

soliciting and servicing existing customer accounts

awarded to Smith in the 2012 MSA and Judgment and

the 2014 Settlement and Judgment. Reversal of that

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finding of contempt renders the following points on appeal moot: Point III (challenging the award of damages

based on that contempt finding) and Point V (challenging the evidence of a factual matter underlying that

contempt finding).

Improvidently Granted Injunctive Relief

Zweifel filed in the trial court a counterclaim to

the motion for contempt, claiming the preliminary injunction was improvidently granted and seeking damages. He argues that “if this Court rules that Smith

never had a permanent, perpetual non-compete,” then

that means the preliminary injunction was improvidently granted and the matter must be remanded to

the trial court to dissolve that injunction and determine his damages. A definitive holding that Smith

did not have a permanent non-compete and therefore

Zweifel’s conduct was permissible under the judgments might have, as Zweifel suggests, automatically

resulted in a conclusion that the injunction prohibiting

that conduct was improvidently granted and is therefore dissolved. See generally Citizens for Ground Water

Protection v. Porter, 275 S.W.3d 329, 352 (Mo. App. S.D.

2008) (when party procuring temporary injunctive relief ultimately receives an adverse judgment on the

merits of the case, the issuance of the injunction is

deemed improper and is dissolved). But we have not

made any definitive conclusions about the meaning of

the 2012 MSA and Judgment or the 2014 Settlement

and Judgment. Again, our conclusion is that those

judgments were not clear as to the parties’ obligations

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and restrictions regarding the existing residential customers awarded to each of them. While this conclusion

means that Zweifel cannot be held in contempt of the

2012 MSA and Judgment or the 2014 Settlement and

Judgment, that is not the same as a dispositive holding

that his conduct was permissible under those judgments. Zweifel has not cited any authority that would

support deeming the preliminary injunction improvident and dissolving it under these circumstances.

Point VI is denied.

Conclusion

The judgment is reversed to the extent it holds

Zweifel in contempt for soliciting and servicing existing customer accounts awarded to Smith in the 2012

MSA and Judgment and the 2014 Settlement and

Judgment.

Robert M. Clayton III, P.J. and Roy L. Richter, J.,

concur.

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APPENDIX F

IN THE CIRCUIT COURT OF THE

23RD JUDICIAL CIRCUIT

ASSOCIATE CIRCUIT DIVISION

COUNTY OF JEFFERSON

STATE OF MISSOURI

LINDA R. ZWEIFEL, n/k/a

LINDA R. SMITH,

Petitioner,

RANDALL ZWEIFEL,

Respondent.

)

Cause No.

09JE-DR00715-01

Division No. 12

JUDGMENT

(Filed Nov. 20, 2018)

Nothing in this Court’s decision in the abovecaptioned cause purports to set aside or alter the Judgment Order by the Honorable David D. Noce, United

States Magistrate Judge, United States District Court,

Eastern District of Missouri, Eastern Division, No.

4:16 CV 144 DDN, signed on June 11, 2018. After consideration of the pleadings, prior orders, judgments, evidence adduced during the trial on February 20,

February 21, March 23, March 26, and April 6, 2018,

the exhibits that were admitted as evidence by this

Court, transcripts and deposition filed as part of the

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record, arguments of counsel, and being fully advised

in the premises, this Court finds as follows:

Procedural History

The Court sets forth the Procedural History of this

case in the following timeline:

DATE

DESCRIPTION

07/15/2009 Petitioner files a Petition For Dissolution

Of Marriage.

10/22/2009 Petitioner files a Statement of Property

that lists under subsection P. Partnership

Interests – Lawn Managers 500 shares

each.

01/13/2011 Respondent files a Statement of Property

that lists under “List any other asset not

already listed herein” – Lawn Managers

Accts.Rec.

05/01/2012 Judgment and Decree of Dissolution of

Marriage is approved and signed by Hon.

Judge Lisa Page.

05/23/2012 Judgment and Decree of Dissolution of

Marriage is set aside and the case is continued to June 11, 2012 for announcement.

06/22/2012 Respondent files Motion To Compel Settlement And Judgment.

07/25/2012 Hon. Judge Lisa Page grants Respondent’s Motion To Compel Settlement And

Judgment.

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08/07/2012 Judgment And Decree Of Dissolution Of

Marriage is approved and signed by the

Hon. Judge Lisa Page.

02/04/2013 Petitioner files her First Motion For

Contempt.

02/19/2013 Respondent files a Response and Affirmative Defense.

07/02/2013 Hon. Judge Lisa Page finds Respondent in

contempt of Court pursuant to the Judgment And Decree of Dissolution of Marriage. Included in Judge Page’s July 2,

2013 Judgment for contempt are the following findings: Each of the affirmative

defenses raised by the Respondent fail

due to the conduct of the Respondent in

locking the Petitioner out of the business

which she was entitled to operate until

December 31, 2012; Petitioner does come

to the Court with clean hands; The Court

finds the Respondent’s expert Kathy Lawson, to not be credible; The Court finds

that the Petitioner has the right to receive

an additional sum of $77,657.46, but because this was not part of the contempt

citation for this hearing, this sum is not

awarded to Petitioner at this time; Respondent has failed and refused to pay to

Petitioner $67,000.00 per the property

settlement and that Respondent’s action

are a direct, knowing, willful and contumacious disregard and contempt for the

Court’s Order and Judgment; The Court

will grant Respondent a credit for monies

withdrawn by Petitioner and therefore

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orders Respondent to pay Petitioner the

remaining sum of $75,000.00 due with

statutory interest from May 1, 2012; The

Court finds that the Respondent has the

ability to pay the above sums to purge

this contempt; and The Court further

awards Petitioner’s attorney Kevin

Roberts, attorney fees in the sum of

$16,500.00.

07/31/2013 Respondent files a Motion To Amend

Judgment, Or In The Alternative, Motion

For A New Trial.

08/28/2013 Hon. Judge Lisa Page denies Respondent’s

Motion To Amend Judgment, Or In The

Alternative, Motion For A New Trial.

09/06/2013 Respondent files a Notice Of Appeal of the

Judgment entered on July 2, 2013.

09/14/2013 Petitioner files a Satisfaction Of the Judgment of $75,000.00, plus interest, entered

by the Court on July 2, 2013.

05/20/2014 Missouri Court of Appeals – Eastern District dismisses Respondent’s appeal of the

judgment of civil contempt regarding the

enforcement of divorce decree provisions

because Respondent purged himself of the

contempt by complying with the contempt

order.1

06/18/2014 Respondent files a Response To Petitioner’s Second Motion For Contempt and

No. ED100416, Opinion of the Missouri Court of Appeals–

Eastern District.

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Respondent files a Counter Motion For

Contempt.

07/25/2014 The parties settle Petitioner’s Second Motion For Contempt and Respondent’s

Counter Motion For Contempt.

08/26/2016 Petitioner files Third Motion For Contempt And Motion For Temporary Restraining Order And Preliminary And

Permanent Injunction.

09/01/2016 Hon. Judge Travis Partney issues a Temporary Restraining Order (TRO).

09/12/2016 Respondent files Answer and Affirmative

Defenses To Petitioner’s Third Motion For

Contempt And Motion For Temporary Restraining Order And Preliminary And Permanent Injunction.

10/11/2016 Hon. Judge Travis Partney enters an order that modifies the TRO.

11/18/2016 Hon. Judge Travis Partney issues a

Preliminary Injunction incorporating all

terms of said Temporary Restraining Order from September 1, 2016, and in addition, the Court incorporates all terms

from the October 11, 2016 Modification of

the Temporary Restraining Order.

09/08/2017 Respondent files Motion For Summary

Judgment.

10/16/2017 Petitioner files First Amended Third

Motion For Contempt.

10/26/2017 Respondent files Answer and Affirmative

Defenses To Petitioner’s First Amended

Third Motion For Contempt And Motion

91a

For Temporary Restraining Order And

Preliminary And Permanent Injunction

And Amended Counterclaim.

10/26/2017 Respondent files Counterclaims as follows: Count I (Suit for Damages for Improvidently Granted Injunctive Relief );

Count II (Breach of Separation Agreement); Count III (Respondent’s Second

Motion for Contempt); and Count IV

(Respondent’s Motion to Enforce Marital

Separation Agreement).

11/17/2017 Counsel make arguments on Respondent’s

Motion For Summary Judgment, Respondent’s Motion To Modify Order For

Preliminary Injunction regarding the

bond previously posted, Respondent’s Motion For Clarification of the Rights of the

Parties Pendente Lite, and various discovery motions. This Court takes said Motion

For Summary Judgment under advisement. After evidence and arguments by

counsel on Respondent’s Motion To Modify

Order For Preliminary Injunction regarding the bond previously posted, this Court

issues an Order that amends the bond.

12/04/2017 This Court denies Respondent’s Motion

For Summary Judgment.

02/20/2018 Trial is held regarding the pending litigation.

02/21/2018 Trial is held regarding the pending litigation.

03/23/2018 Trial is held regarding the pending litigation.

92a

03/26/2018 Trial is held regarding the pending litigation.

04/06/2018 Trial is held regarding the pending litigation. By agreement of counsel, the parties

are granted 45 days from the date of the

completion of the trial transcript, to file

proposed findings of fact, proposed conclusions of law, and proposed judgment.

06/20/2018 Petitioner files Fourth Motion For Contempt And Request For Sanctions And

Other Relief.

06/22/2018 Respondent files Motion To Reopen Evidence, To Vacate Preliminary Injunction,

And For Judgment In Respondent’s Favor.

06/25/2018 Respondent files Motion To Dismiss Petitioner’s Fourth Motion For Contempt, Etc.

07/16/2018 The trial transcript is completed by the

court reporter and this Court enters an

order that grants, up to and including August 30, 2018, for counsel to file proposed

findings of fact, proposed conclusions of

law, and proposed judgment.

07/18/2018 Counsel for the parties make arguments

at a hearing on Respondent’s Motion To

Reopen Evidence, To Vacate Preliminary

Injunction, And For Judgment In Respondent’s Favor. This Court takes said

motion under advisement.

07/19/2018 This Court denies Respondent’s Motion To

Reopen Evidence, To Vacate Preliminary

Injunction, And For Judgment In Respondent’s Favor.

93a

07/19/2018 This Court enters an Amended Order that

grants counsel, up to and including September 4, 2018, to file proposed findings

of fact, proposed conclusions of law, and

proposed judgment.

08/29/2018 Joint Request For Extension Of Time is

granted by this Court, up to and including

September 28, 2018, for counsel to file

proposed findings of fact, proposed conclusions of law, and proposed judgment.

10/02/2018 Corrected Joint Request For Extension Of

Time is granted by this Court, up to and

including October 9, 2018, for counsel to

file proposed findings of fact, proposed

conclusions of law, and proposed judgment.

10/09/2018 Counsel for each party timely efiled their

proposed findings of fact, proposed conclusions of law, and proposed judgment.

Petitioner’s First Amended Third Motion For Contempt, Respondent’s alleged Affirmative Defenses, Respondent’s Counterclaims, and Petitioner’s Motion To

Amend And/Or Correct the Record Nunc Pro Tunc are

pleadings that this Court considers from the evidence

adduced on the above-referenced trial dates, as part of

this Judgment in the above-captioned cause. Any other

pending motions will be considered by this Court at a

later hearing and/or trial date.

94a

Findings of Fact

The Court hereby enters the following findings of

fact from the evidence adduced during the trial that

occurred on February 20, February 21, March 23,

March 26, and April 6, 2018:

1. This case involves a lawn care business that was

organized by the Respondent, RANDALL ZWEIFEL,

as Lawn Managers, Inc. (“Lawn Managers”) in 1979

and incorporated in 1981, prior to the prior to the marriage of the parties.2

2. Lawn managers is a lawn care company that specializes in fertilizing and weed control.3 This business

does not do mowing, snow removal, nor landscaping.4

3. The parties were married on October 30, 1993, and

from the date of their marriage to the date of the final

Judgment of Dissolution of Marriage on August 7,

2012, both parties were involved with this lawn care

business. The Court finds that each party knows this

lawn care business that was developed over several

years, and the Court finds that each party knows the

meaning of “Commercial Customer Accounts,” “Residential Customer Accounts,” “Miscellaneous Commercial Accounts,” and “Accounts Receivable,” from the

Trial Transcript, p.784, line 19 to p.785, line 2; Exhibit 2,

attached to Respondent’s Motion For Summary Judgment-Affidavit of Randall Zweifel, ¶s 1-3.

Transcript, p.785, lines 3 to 13.

Id.

95a

date of the signing by the parties of the Marital Settlement Agreement in April 2012 to the present.

4. On July 15, 2009, Petitioner filed a Petition For

Dissolution Of Marriage.

5. On October 22, 2009, Petitioner filed a Statement

of Property that lists under subsection P. Partnership

Interests – Lawn Managers 500 shares each.

6. On April 10, 2012, the Petitioner, LINDA R.

ZWEIFEL, n/k/a LINDA R. SMITH, signed under oath

a “Martial Settlement Agreement” with a page number

at the bottom of “26.”

7. On April 17, 2012, the Respondent, RANDALL

ZWEIFEL, signed under oath a “Martial Settlement

Agreement” with a page number at the bottom of “26.”

8. On May 1, 2012, as part of the Judgment and Decree of Dissolution of Marriage between the parties, a

“Marital Settlement Agreement” was agreed upon by

the parties and it includes “Section 5. Business Interest.” In Section 5 it has subparts as follows:

5.01 Description of Business and Division of

Corporate Shares

5.02 Division of Accounts and Accounts Receivables

5.03 Division of Equipment and Vehicles

5.04 Completed Litigation

96a

5.05 Potential Tax Liability

5.06 Development of New Business.5

9. Section 5.02 Division of Accounts and Accounts Receivables includes the following language: “(1) Commercial Accounts Linda is awarded all right title, and

interest in the Lawn Champs and miscellaneous commercial accounts and accounts receivables of the corporation. (described in Exhibit D). Randy is awarded

all right, title and interest in all other commercial accounts and accounts receivables of the business. (2)

Residential Accounts (a) Accounts Awarded to Linda

Linda is awarded all right, title, and interest in all residential accounts and accounts receivables of the corporation in the following zip codes: . . . (b) Accounts

Awarded to Randy Randy is awarded all right, title,

and interest in all residential accounts and accounts

receivables of the corporation in the following zip

codes: . . . ”6

10. §5.02 further provided that Linda is awarded all

right, title, and interest in all residential accounts and

accounts receivables of the corporation in the following

nineteen (19) zip codes: 63341, 63368, 63366, 63376,

63304, 63303, 63301, 63367, 63385, 63362, 63379,

63349, 63021, 63122, 63131, 63141, 63124, 63010, and

63052.7

Petitioner’s Exhibit 1.

Id.

97a

11. Section 5.06 Development of New Business includes the following language: “Linda will establish a

new lawn care company using the name Progressive

Lawn Managers, Inc. doing business as Lawn Managers . . . ” Section 5.06 also includes non-solicitation language for a period of two years, refers to “new

business,” and has language that allows either party to

sell any of their commercial accounts or any of their

residential accounts as referenced in Section 5.02, that

each of them will give the other party the first opportunity to purchase the accounts that are up for sale.8

12. In order to divide the Lawn Managers customer

data base, the parties used the services of Real Green,

the software provider that both companies use to manage their customer accounts.9

13. The Court finds that the Judgment Of Decree of

Dissolution of Marriage and Marital Settlement

Agreement does not prevent current customers of Petitioner and Respondent from seeking similar lawn

care services from a lawn care business, other than the

parties in this action. The Court finds that there are

ten (10) major competitors in the St. Louis area, but

there is hundreds that provide this same lawn care service offered by the companies of Petitioner and Respondent.10

Id.

Exhibit 2, attached to Respondent’s Motion For Summary

Judgment-Affidavit of Randall Zweifel, ¶s 5-6.

Trial Transcript, p.791, line 18 to p792, line 4.

98a

14. The Court finds that the Marital Settlement

Agreement is clear and unambiguous and that the parties agreed to all the terms of said settlement agreement, including but not limited to the terms related to

the lawn care business.

15. The Court finds that due to a clerical error, the

wrong Martial Settlement Agreement was attached to

the Divorce Decree, signed by the Honorable Lisa Page

on May 1, 2012, which each of the parties received.

Later, Judge Page entered a new Divorce Decree on August 7, 2012 and she clarified the record that all the

miscellaneous commercial accounts were to go to Petitioner.11

16. The Court finds Petitioner credible when she testified at trial that the parties knew and understood the

meaning of “miscellaneous commercial accounts” at

the time that these accounts were split.12

17. The portions of the July 25, 2014 settlement that

are relevant to the pending litigation are as follows: “2)

Parties agree that each may sign up and service new

commercial accounts wherever they may be regardless

of zip code, this includes new misc. commercial accounts; 3) Parties agree that each of them shall not

zip codes awarded to the other in their divorce settlement & decree agreement dated 5/1/12. This non-compete agreement shall remain in effect for two years

Petitioner’s Exhibit A of Petitioner’s Motion To Amend

And/Or Correct the Record Nunc Pro Tunc.

Trial Transcript, p.65, line 2 to p.67, line 25.

99a

from today’s date and is enacted in lieu of the prior

non-solicitation clause found in paragraph 5.06 of the

Settlement Agreement referred to above; 4) All other

terms of the parties divorce decree and settlement shall

remain in full force & effect; 5) Respondent shall transfer to Petitioner all of his existing residential customers in the following zip codes: a) 63038 (Ellisville Area)

b) 63040 (Grover Area) This shall include any accounts

receivable from those accounts. Said transfer to be conducted by Peter Brown from Real Green on Monday

July 28th or as soon thereafter as it may be accomplished by Real Green. These zip codes are covered by

paragraph 3) also.”13

18. The Court finds that the July 25, 2014 settlement

is clear and unambiguous and that the settlement

agreed upon by the parties, including but not limited

to the two (2) years non-compete agreement, refers to

new business, and not customer accounts awarded in

the Marital Settlement Agreement and final Judgment

of Dissolution of Marriage. (emphasis added).

19. Counsel for Petitioner and Counsel for Respondent stated to this Court that there is no caselaw in Missouri that addresses the issue of whether “customer

lists” are considered property within the context of

property division in a dissolution of marriage proceeding. Therefore, counsel stated to this Court that this is

a case of first impression in Missouri regarding this issue.

Petitioner’s Trial Exhibit 2.

100a

20. The Temporary Restraining Order (TRO) issued

by Judge Partney on September 1, 2016, ordered the

following: “a. Randall Zweifel or anyone acting in concert with him is hereby restrained from contacting directly or indirectly any customers and/or accounts

awarded to Petitioner either in the original Judgment

of May 1, 2012 or the subsequent Judgment of July 25,

2014; b. Respondent or anyone acting in concert with

him is hereby restrained from soliciting, directly or indirectly any customers and/or accounts awarded to Petitioner either in the original Judgment of May 1, 2012

or the subsequent Judgment of July 25, 2014; c. Respondent or anyone acting in concert with him is

hereby restrained from providing any services to any

of the customers and/or accounts awarded to Petitioner

whether either in the original Judgment of May 1,

2012 or the subsequent Judgment of July 25, 2014.”14

21. On October 11, 2016, Judge Partney modified the

TRO as follows: “1) Respondent is permitted to send a

letter to a specific list of accounts who contacted Respondent after the letter of late July 2016 for the purpose of arranging services, and said letter shall state:

“We cannot service your account at this time. We are

unable to provide additional information or discuss the

matter further; 2) With respect to any other accounts

who may contact Respondent or his company requesting service after the date of this Order Respondent

shall notify Petitioner through counsel of the name and

address of said account and when said contact was

Petitioner’s Exhibit 3.

101a

made and Respondent shall then send the same letter

to said account; 3) With respect to those accounts referred to paragraph 1) Respondent shall furnish a list

of all such accounts name and address, to whom the

letter will be sent; 4) In all other respects the terms of

the previous TRO shall remain in full effect until further Order of the Court.” 15

22. The Court finds that the Respondent serviced the

following zip codes in violation of the Judgment of Dissolution of Marriage, Marital Settlement Agreement,

subsequent settlement agreements between the parties, and prior Court Orders:

ZIP CODES AWARDED

TO PETITIONER

63010, 63021, 63052,

63122, 63124, 63131,

63141, 63301, 63303,

63304, 63341, 63349,

63362, 63366, 63367,

63368, 63376, 63379,

63385.16

ZIP CODES SERVICED

BY RESPONDENT IN

VIOLATION

63010, 63021, 63052,

63122, 63124, 63131,

63141, 63301, 63303,

63304, 63367, 63368,

63376, 63385.17

23. From the above chart in paragraph 22 of this

Judgment, the Court finds that Respondent serviced at

Judge Partney’s Order, dated October 11, 2016.

Petitioner’s Exhibit 1. (Note: these zip codes are in numerical order for chart purposes).

Trial Transcript, p. 208, line 13 to p.210, line 11; Petitioner’s Exhibit 118.

102a

least 363 residential accounts in zip codes awarded to

Petitioner.18

24. The Court finds that, despite ample testimony regarding the listing of miscellaneous commercial accounts, all parties knew and understood what was

meant by a “miscellaneous commercial account” and

that was any account coded by the letter “M.” The

Court finds that the list contained in Petitioner’s Exhibit 104a is the best evidence of a listing of all miscellaneous commercial accounts at the time of the divorce

of the parties.19 The Court finds that Petitioner had a

property interest in each miscellaneous commercial account as identified in Petitioner’s Exhibit 104a at the

time Petitioner filed her First Amended Third Motion

for Contempt.

25. The Court finds that, despite ample testimony regarding the listing of residential accounts, all parties

knew and understood what was meant by a residential

account. The Court finds that the list contained in Petitioner’s Exhibit 101 is the best evidence of a listing of

all residential accounts at the time of the divorce of the

parties.20 The Court finds that Petitioner had a property interest in each residential account as identified

Id.

Trial Transcript, p.65, line 2 to p.67, line 25; Petitioner’s

Exhibit 104a.

Trial Transcript, p.70, line 4 to p.71, line 13; Petitioner’s

Exhibit 101.

103a

in Petitioner’s Exhibit 101 at the time Petitioner filed

her First Amended Third Motion for Contempt.21

26. The Court finds that the Respondent mailed a

“We Want You Back” letter to customers of Petitioner.22

27. The Court finds that Respondent intentionally

sent the “We Want You Back” letter to the customers

who were awarded to Petitioner in either 2012 or 2014

in an attempt to take these accounts, by Respondent’s

own admission.23

28. The Court finds that the “We Want You Back” letter is misleading and false when it states: “Due to

circumstances beyond our control . . . ” Respondent admitted that he agreed to the Marital Settlement Agreement that divided the customer accounts in 2012.24 The

Respondent also admitted that those divided customer

accounts were “her property.”25

29. The Court finds that Respondent actively serviced residential accounts in each of the 19 zip codes

awarded to Linda in the 2012 Judgment, after the 2014

settlement, by Respondent’s own admission.26

Id.

Trial Transcript, p.1208, lines 4 to 11; Petitioner’s Exhibit

108.

Id.

Trial Transcript, p.1207, lines 13 to 18.

Trial Transcript, p.699, line 24 to p.700, p.4 (from transcript of the TRO hearing on August 31, 2016).

Trial Transcript, p.699, line 24 to p.700, line 7 (from transcript of the TRO hearing on August 31, 2016).

104a

30. The Court finds that Respondent, since 2012, has

added approximately 2,000 customers to his database

from drive-by estimates in those zip codes awarded to

Petitioner.27 The addresses are then maintained in Respondent’s database for solicitation purposes if he does

not sign them up initially. Importantly, these addresses

were residential accounts in zip codes awarded to Petitioner. The evidence established that Respondent was

actively using these addresses, which he had gathered

during drive-by estimates, to send solicitations even

though he was not supposed to be soliciting residential

accounts in Petitioner’s zip codes.28

31. The Court finds that Respondent sent solicitation

mailings to accounts which would be classified as residential during the time the non-compete clause was in

full force and effect.29

32. The Court finds that Respondent placed yard

signs in zip codes awarded to Petitioner.30

33. The Court finds that Respondent provided service

estimates to residential accounts in zip codes awarded

to Petitioner.31

Petitioner’s Exhibit 215(G) and 215(I).

Trial Transcript, p.66, lines 2 to 5; Petitioner’s Exhibit 104.

Petitioner’s Exhibits 111A, 111B, 111C, 111D, 202, and

204.

Trial Transcript, p.1113, lines 18 to 21.

Trial Transcript, p.1113, line 20 to 24.

105a

34. The Court finds that Respondent serviced at least

596 residential accounts in zip codes awarded to Petitioner.32

35. The Court rejects Respondent’s argument and excuse that it was ok to service customers who approached him for service and insisted that he provide

service to these customers. Respondent was fully

aware that these customer accounts were awarded to

Petitioner in the original Judgment of Dissolution of

Marriage and Marital Settlement Agreement. Respondent should have communicated to these customers that he cannot service their accounts at this time,

and the Respondent should have told these customers

that he is unable to provide additional information or

discuss the matter further.

36. The Court finds that the Respondent did not purchase the servicing of customers in existence at the

time of the July 25, 2014 settlement because said settlement refers to new customers and it states: “All

other terms of the parties divorce decree and settlement

shall remain in full force & effect.”33

37. The Court finds that the Respondent knew that

he did not purchase the servicing of customers from

Petitioner in existence at the time of the July 25, 2014

settlement because the language in said settlement is

Trial Transcript, p. 208, line 13 to p.210, line 11; Petitioner’s Exhibit 118.

Petitioner’s Exhibit 2.

106a

clear and unambiguous.34 Therefore, the Court finds

that the Respondent is not credible when he testified

that he believed that he purchased customers awarded

to Petitioner in the original Judgment of Dissolution of

Marriage and Marital Settlement Agreement. The

Court further finds that Respondent presented no

written agreement signed by the parties that a purchase of servicing of customer accounts had been made

at the time of the July 25, 2014 settlement.

38. The Court finds that the Respondent intentionally attempted to take customer accounts from Petitioner, in violation of the original Judgment of

Dissolution of Marriage and Marital Settlement

Agreement, given Respondent’s 35 years of experience

in the lawn care business, given Respondent’s actions,

including but not limited to the “We Want You Back”

letter sent to customers by Respondent and his employees described above.

39. The Court finds that the Respondent took customer accounts from Petitioner, in violation of the original Judgment of Dissolution of Marriage and Marital

Settlement Agreement, and this was the result of Respondent’s intentional and contumacious conduct.

40. The Court finds the Petitioner credible when she

testified that ten (10) years is the average length of

Id; and Trial Transcript, p.700, lines 21 to 25 (from transcript of the TRO hearing on August 31, 2016).

107a

time that a customer is serviced by Petitioner and Respondent.35

41. The Court finds that Respondent’s mailing of “We

Want You Back” letter amounts to Respondent’s intentional and contumacious conduct, in violation of the

Court’s Orders, Judgment of Dissolution of Marriage,

and Marital Settlement Agreement.

42. The Court finds that customers canceled service

with the Petitioner, after Respondent mailed the “We

Want You Back” letter.36

43. The Court finds from the evidence that the “We

Want You Back” letter caused customers to cancel service with the Petitioner.

44. The Court finds that the Petitioner suffered damages as a result of Respondent’s mailing of the “We

Want You Back” letter, and Respondent’s servicing of

customer accounts that were awarded to Petitioner in

the 2012 and 2014 Judgments.

45. The Court finds that the Petitioner is credible

when she testified that her damages includes an

amount of lost gross revenue of $1,429,000.00, from the

279 cancellations of customers caused by the Respondent’s actions.37

Trial Transcript, p. 232, lines 12 to 18.

Petitioner’s Exhibit 202.

Trial Transcript, p.234, line 22 to p.235, line 14, and Exhibit 202.

108a

46. The Court finds that the testimony of Respondent’s expert, Michael Morhaus, to be unpersuasive regarding his calculation of damages amount, based on

his review of the limited information provided to him.

Mr. Morhaus was not aware of all the relevant factors,

including but not limited to: the letters which were

sent by Respondent; the Court Orders entered which

pertained to whether or not Respondent could send

such mailings; the mailings, drive-by estimates, yard

signs, and other forms of solicitation that by the Respondent and his employees; this Court’s prior orders

concerning non-solicitation and non-compete; and, the

Judgment of Dissolution Of Marriage and terms of the

Marital Settlement Agreement.38

47. The Court finds that there are variable factors

that may have caused some customers to discontinue

services with Petitioner’s company, including but not

limited to: relocation, death, and/or financial constraints. The Court finds that these variable factors

should be deducted from gross revenue in calculating

damages from customer cancellations, and the Court

finds this deduction to be a 14% attrition rate, as testified by Respondent.39 This 14% attrition rate was for

the years of 2012 to 2017.40

48. The Court finds that Respondent’s expert, Michael Morhaus, credible when he testified that a sixtysix point two percent (66.2%) calculation for variable

Trial Transcript p.1047, line 18 to p.1056, line 20.

Trial Transcript, p.794, lines 4 to 13.

Trial Transcript, p.794, lines 14 to 18.

109a

expenses should be deducted from gross revenue in calculating net revenue.41

49. Based on the above percentages for deductions,

the Court calculates Petitioner’s damages as follows:

$1,429,000.00 (gross revenue lost)

- 200,060.00 (14% deduction-variable factors/

attrition rate that cause cancellations) $

1,228,940.00

- 813,558.28 (66.2% deduction for variable

expenses)

$ 415,381.72 (TOTAL DAMAGES-LOST NET

REVENUE).

50. The Court finds that Petitioner’s reasonable attorney’s fees for handling Petitioner’s First Amended

Third Motion For Contempt are ninety-four thousand

thirty-seven dollars and sixty-five cents ($94,037.65).42

51. The Court finds that Petitioner’s attorney’s fees

in the trademark case of Fifteen Thousand Three Hundred Twenty-Two Dollars and Fifty Cents ($15,322.50)

for time spent by Petitioner’s counsel for defense of this

aspect of the Federal trademark case will be addressed

in the trademark case by the Federal Court Judge.

52. The Court finds that the Petitioner did not fail to

mitigate damages, and the Court finds that the doctrine of laches, res judicata, and collateral estoppel do

not apply to the current litigation pending before this

Court.

Trial Transcript, p.1021, lines 3 to 7.

Petitioner’s Exhibit 217.

110a

53. The Court finds that the Respondent failed to

meet his burden regarding Respondent’s Counterclaim-Count I (Suit for Damages for Improvidently

Granted Injunctive Relief ).

54. The Court finds that the Respondent failed to

meet his burden of proof regarding Respondent’s Counterclaim-Count II (Breach of Separation Agreement).The Court finds Petitioner credible when she

testified that Flagstar repeatedly made mistakes in

crediting her payments, and this issue is an “ongoing

problem.”43 Respondent presented no evidence that the

delay in posting payments by Flagstar was Petitioner’s

fault, and not Flagstar’s mistakes.

55. The Court finds that Respondent’s CounterclaimCount III (Respondent’s Second Motion for Contempt)

fails because of the findings of fact in paragraph 54 of

this Judgment.

56. Regarding Respondent’s Counterclaim-Count IV

(Respondent’s Motion to Enforce Marital Separation

Agreement-return of Lawn Managers, Inc. Database),

the Court finds that the Respondent acknowledged

that both parties had access to the entire historical database when the accounts were divided on or about

May 1, 2012 and that this division was mutually consensual by Petitioner and Respondent and made with

full knowledge of the Petitioner and Respondent.44

Therefore, the Court finds that Respondent’s

Trial Transcript, p.1558, line 25 to p.1559, line 8.

Trial Transcript, p.711, line:8 to p.712, line 2 (Respondent’s testimony from transcript of hearing on November 17, 2017).

111a

Counterclaim-Count IV (Respondent’s Motion to Enforce Marital Separation Agreement-return of Lawn

Managers, Inc. Database) fails.

Conclusions Of Law

57. A party alleging contempt establishes a prima facie case for civil contempt when the party proves: (1)

the contemnor’s obligation to perform an action as required by the decree; and (2) the contemnor’s failure to

meet the obligation.45 The alleged contemnor then has

the burden of proving that person’s failure to act was

not due to his or her own intentional and contumacious

conduct.46

58. These principles of civil contempt apply to domestic relations disputes.47

59. Civil contempt is for the protection of a party to

the litigation, the party for whose benefit the order,

judgment or decree was entered. Its function is to provide a coercive means to compel the other party to the

litigation to comply with relief granted to his or her

adversary. The civil contemnor has at all times the

Walters v. Walters, 181 S.W.3d 135 (2005 Mo.App.2005);

Love v. Love, 75 S.W.3d 747, 754 (Mo. App. 2002). Love at 759

(citing Lyons v. Sloop, 40 S.W.3d 1, 10 (Mo. App. 2001).

Id. at 759-60; Walters v. Walters, 181 S.W.3d 135 (2005

Mo.App.2005).

Teefey v. Teefey, 533 S.W.2d 563 (Mo. banc 1976).

112a

power to terminate his punishment by compliance

with the order of the court – i.e.: purging.48

60. In a dissolution proceeding, “The court’s order as

it affects distribution of marital property shall be a final order not subject to modification . . . ”49

61. This Court notes that in Chapter 452 of the Revised Statutes of Missouri, titled: “Dissolution Of Marriage, Divorce, Alimony And Separate Maintenance,” a

definition of “Property” is not provided.

62. The Statement of Property form that is included

in the Civil Procedure Forms, provided by the Missouri

Supreme Court for a Dissolution proceeding, includes

a section for “Business” and is required to be listed, if

applicable.50

63. Missouri’s Criminal Code has the following definition: “Property,” anything of value, whether real or

personal, tangible or intangible, in possession of in action.51

64. In interpreting a separation agreement incorporated into a decree, the “normal rules of contract

Id.

§452.330.5 RSMo.; Leslie v. Leslie, 827 S.W.2d 180

(Mo.1992), cited in Lindo v. Higginbotham, 517 S.W.3d 558

(Mo.App.2016).

Form CAFCO40 in the Civil Procedure Forms section of

the Missouri Supreme Court and 23rd Judicial Circuit Local Rule

68.4.

51 §556.061(39) RSMo.

113a

construction apply . . . ”52 “When the language of a provision is in dispute, the court must determine the parties’ intent as manifested in the document itself and

not by what the parties say they intended.”53 This is

done by giving the words of the agreement their plain

and ordinary meaning as understood by a reasonable

and average person.54 It is only when the language of

the decree is ambiguous that a court may determine

the interpretation of the settlement agreement by reference to evidence beyond the face of the decree itself.55

65. Every contract, combination or conspiracy in restraint of trade or commerce in this state is unlawful.56

66. A restrictive covenant that restrains trade may

be enforced in Missouri if it is directed to the protection

of trade secrets or customer contacts, and if it is reasonable as to time and place.57 For reasons stated in

paragraph 70f. of this Judgment, the Court finds that

the Martial Settlement Agreement of the parties is not

a restrictive covenant that restrains trade.

Daily v. Daily, 912 S.W.2d 110, 114 (Mo. App. 1995) (citing

Blackman v. Blackman, 767 S.W.2d 54, 59 (Mo. App. 1989)).

Id.

Hughes v. Hughes, 23 S.W.3d 838 (Mo.App.2000); Bolton

v. Bolton, 950 S.W.2d 268, 271 (Mo. App. 1987).

§416.031 RSMo.

Schmersahl, Treloar & Co., P.C. v. McHugh, 28 S.W.3d

345, (Mo.App.2000); Easy Returns Midwest v. Schultz, 964

S.W.2d 450, Mo.App.1998).

114a

67. The doctrine of res judicata renders a judgment

conclusive in a subsequent action between the same

parties, not only as to all issues tried, but as to all issues which might have been litigated.58 The Court

finds that the doctrine of “Res Judicata” does not apply

to the current pending issues in this case because there

was information found by Petitioner, after the July

2014 settlement, that if known prior to the July 2014

settlement, may have been litigated, as part of Petitioner’s Second Motion For Contempt proceedings.

68. Collateral estoppel, or issue preclusion, precludes

the same parties, or those in privity with the parties,

from relitigating issues that have been previously litigated.59 In deciding whether the application of collateral estoppel is proper, the following four factors are

considered: (1) whether the issue in the present case is

identical to the issue decided in the prior adjudication;

(2) whether the prior adjudication resulted in a judgment on the merits; (3)

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