Searching over 5,500,000 cases.

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Lawn Doctor, Inc. v. Rizzo

United States District Court, D. New Jersey

March 21, 2019

LAWN DOCTOR, INC. Plaintiff,
JOSEPH RIZZO, et al., Defendants.



         Pending before the Court is Lawn Doctor, Inc.'s (“Lawn Doctor”) supplemental motion for sanctions filed pursuant to the Court's January 31, 2017 Order. (Docket Entry No. 80). Defendants Joseph Rizzo (“J. Rizzo” or “Mr. Rizzo”) and Annamaria Rizzo (“A. Rizzo”) (collectively, the “Rizzos”) oppose Lawn Doctor's motion. The Court administratively terminated Lawn Doctor's motion via its Memorandum Opinion and Order entered on October 25, 2017, holding its decision on same in abeyance pending limited additional discovery. Docket Entry Nos. 86 & 87. That discovery is complete. As such, the Court now considers Lawn Doctor's supplemental motion for sanctions. The Court has fully reviewed all arguments raised in support of and opposition to Lawn Doctor's motion. The Court considers Lawn Doctor's motion without argument pursuant to L.Civ.R. 78.1(b). For the reasons set forth more fully below, Lawn Doctor's supplemental motion for sanctions is GRANTED.

         I. Background and Procedural History

         Given the parties and the Court's familiarity with this matter, the Court does not restate the facts of this case at length herein. Instead, the Court focuses only on those facts most pertinent to its consideration of Lawn Doctor's supplemental motion for sanctions.

         On March 14, 2014, the Court entered a Letter Order in which it found that the Rizzos violated the terms of the Consent Injunction entered in this matter on January 25, 2013 and, thus, were in contempt of court. Letter Order of 3/14/2014 at 4; Docket Entry No. 55. Having determined that the Rizzos were in contempt, the Court turned to the appropriate civil contempt sanction. Id. After reviewing the parties' arguments and the proofs submitted, the Court determined that requiring the Rizzos to pay $178, 000, the established fair market value of Lawn Doctor's customer list, represented the appropriate remedy. In reaching this conclusion, the Court noted:

[T]he Consent Injunction which was entered in this matter on January 25, 2013, and with the benefit of counsel for the Defendants, clearly prohibited Defendants from either operating Advanced Enviro Care in the restricted territory themselves or acting as a competitive lender to someone buying and intending to operate the company in said area. Defendants not only violated the Consent Injunction when Rizzo entered into the Wilkerson Deal, but then, after being specifically informed by the Court that the Wilkerson Deal violated the Consent Injunction and, after being given the opportunity to remedy the violation before the Court determined what sanction should be entered, Defendants took no actions to try to ameliorate their violation. Nor have the Defendants submitted any evidence that the Wilkerson Deal did not include Plaintiff's customer list. Defendants' actions post the September 13, 2013 motion hearing, i.e., Rizzo's assignment of the promissory note for $275, 000 back to Advance Enviro Care, only exacerbated the problem.

Id. at 5-6.

         The Rizzos appealed the Court's decision to the Court of Appeals for the Third Circuit. While the Third Circuit determined that “[a]mple evidence supports the Court's finding that the Rizzos violated the consent injunction[, ]” it remanded the issue of what the appropriate sanction should be, finding that this Court, in awarding $178, 156.45 as a civil contempt sanction, “erred in shifting the burden onto the Rizzos to prove that the customer service list had not been transferred as part of the Wilkerson Deal.” Lawn Doctor Inc. v. Rizzo. 646 Fed.Appx. 195, 199, 201 (3d Cir. 2016). Specifically, the Third Circuit determined that it was an abuse of discretion for the sanctions award to be based on the value of a customer list that the Court assumed, “in the absence of evidence to the contrary, had been transferred to a third party.” Id. at 201. As such, the Third Circuit vacated the sanctions award of $178, 156.45, and remanded the issue “for consideration of compensatory damages consistent with the evidence in the record.” Id.

         Upon receipt of the Third Circuit's Opinion, the Court directed the parties to submit supplemental briefing on the issue of the appropriate civil contempt sanction. See Letter Order entered 5/25/2016; Docket Entry No. 68. After considering the parties' briefing, “the Court determined that the information submitted by Lawn Doctor did not adequately support the lost profits sanction it sought. As a result, the Court denied Lawn Doctor's supplemental motion for sanctions without prejudice and gave Lawn Doctor an opportunity to submit additional evidence in support of its request for contempt sanctions.” Mem. Op. entered on 10/25/2017 at 9; Docket Entry No. 86 (citing Order of 1/31/2017 at 1-2; Docket Entry No. 78). In response, Lawn Doctor filed the instant supplemental motion for sanctions.

         As noted above, On October 25, 2017, the Court administratively terminated Lawn Doctor's supplemental motion for sanctions in order to permit limited additional discovery regarding “the Rizzos' violation of the Consent Injunction and the appropriate sanction to be imposed in light of same.” Id. at 18. In this regard, the Court permitted discovery from (1) Advanced Enviro Care, regarding its customer and financial records between January 2013 and July 2014; (2) Daniel Wilkerson, regarding the Wilkerson Deal and what was transferred to him in return for the $275, 000 promissory note; and (3) Ken Chapman, Esq., regarding the Wilkerson Deal. See Id. at 18. The Court denied the Rizzos' request for additional discovery, finding the scope of same, i.e., “‘documents and testimony regarding Lawn Doctor's alleged irrigation services, services they surrendered to third parties, records of winterizing systems and service contracts within the zone that AEC provided similar services[, ]'” to be irrelevant. Id. at 18-19 (quoting Rizzos Op. Br. at 10; Docket Entry No. 85).

         Lawn Doctor subpoenaed the three witnesses identified above. Messrs. Wilkerson and Chapman acknowledged receipt of the subpoenas, as did Mr. Rizzo on behalf of Advanced Enviro Care. Lawn Doctor deposed Messrs. Chapman and Rizzo on December 1, 2017. While Mr. Wilkerson was also set to be deposed, he “did not appear for deposition, citing a change in location as making it impossible for him to comply with the subpoena.” (Letter from Ronald A. Giller to Hon. Tonianne J. Bongiovanni of 12/21/2017 at 2; Docket Entry No. 88).

         Neither party requested additional discovery at the conclusion of the aforementioned depositions; nor were any discovery issues raised. On December 21, 2017, Lawn Doctor submitted a letter brief, outlining additional evidence it obtained from Mr. Rizzo's deposition that it believed further supported the conclusion that the customer list was an asset exchanged in the Wilkerson Deal. No. additional briefing was submitted. The Court now considers the appropriate civil contempt sanction to be imposed against the Rizzos.

         II. Analysis

         As the Third Circuit explained, “[t]he burden in a civil contempt proceeding is on the petitioning party. Lawn Doctor, Inc. v. Rizzo, 646 Fed.Appx. 195, 201 (3d Cir. 2016) (citing Howard Johnson, Co. v. Khimari, 892 F.2d 1512, 1516 (11th Cir. 1990)). “Sanctions for civil contempt serve two purposes: ‘to coerce the defendant into compliance with the court's order and to compensate for losses sustained by the disobedience.'” Robin Woods, 28 F.3d at 400 (citing McDonald's Corp. v. Victory Investments, 727 F.2d 82, 87 (3d Cir. 1984)). The purpose of a compensatory award is “to make reparation to the injured party and restore the parties to the position they would have held ...

Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.