After nearly two years of litigation in a Civil Contempt action filed by the Office of the Attorney General (the “Commonwealth”), including nine days of trial in Suffolk Superior Court, the Honorable Linda E. Giles recently dismissed all claims against Rudolph Friedmann’s client. Jonathon Friedmann, Chair of the Litigation Department, assisted by Bobby Rudolph, represented the owner of a 72-acre campground on the south-shore containing 425 campsites.
The instant action originated from a lawsuit filed in August, 2011 by the Commonwealth for alleged unfair and deceptive practices committed by our client. The Commonwealth alleged that seasonal campers who owned and maintained manufactured homes located at the campground were subjected to coercive sales tactics. The lawsuit was brought against three corporate entities and their principal, in an individual capacity, as an officer and manager of the corporate entities (collectively, the “Defendants”).
In September, 2011, the court entered a preliminary injunction prohibiting the Defendants from taking certain steps. In February, 2012, the Commonwealth filed its first Complaint for Contempt, arguing that the Defendants had breached the preliminary injunction. The claims in the first Complaint for Contempt were resolved by the parties entering into a Settlement Agreement called a Final Judgment by Consent (“FJC”) in June, 2012. Shortly thereafter, the Commonwealth filed a second Complaint for Contempt alleging that the Defendants had violated the FJC. The Commonwealth sought to have the Defendants held in civil contempt, with exposure to jail time, and ordered to pay civil penalties to the Commonwealth.
The law in Massachusetts is clear; to constitute civil contempt there must be a clear and undoubted disobedience of a clear and unequivocal command. A finding of civil contempt must be supported by clear and convincing evidence. After nine days of trial, reviewing hundreds of pages of documents and considering the parties pre- and post-trial submissions, Judge Giles found no violation of the FJC by the Defendants. The court held that the Commonwealth failed to give the Defendants adequate notice of its allegations as salient provisions of the FJC were unacceptably ambiguous; the Commonwealth failed to prove that the Defendants subverted the FJC through substantial noncompliance; and the Commonwealth failed to adduce any evidence at trial that the Defendants had committed any contumacious act at all. In fact, the Commonwealth failed to call even a single allegedly “duped” witness to testify at trial.
Most notably, on the eighth day of trial, at the close of the Commonwealth’s case, the court allowed a Motion for Directed Finding filed by Jon Friedmann, completely dismissing the principal of the entities, in his individual capacity, from the lawsuit. It is extremely rare for a court to allow a Motion for Directed Finding at the close of the Plaintiff’s case, and was a big victory for Jon and our client. Essentially, Jon was able to have the principal of the corporate entities dismissed from the case, removing him from individual exposure to any jail time or financial penalties, without ever having to call a witness to the stand. The court held that merely being a corporate officer was insufficient to pierce the corporate veil to find personal liability in the contempt context where the Commonwealth presented no evidence that the principal of the entities, in an individual capacity, clearly and unequivocally failed or refused to comply with clear and unequivocal terms of the FJC. After the trial was concluded, Judge Giles ultimately found in favor of the Defendants on all other claims against the entities.
