Cook Martin Poulson v. Smith

2020 UT App 57
THE UTAH COURT OF APPEALS
C OOK M ARTIN POULSON PC,
Appellee,
v.
DANIEL G. S MITH ,
Appellant.
Opinion
No. 20180488-CA
Filed April 9, 2020
First District Court, Logan Department
The Honorable Kevin K. Allen
No. 140100505
Russell S. Walker, Troy L. Booher, and Beth E.
Kennedy, Attorneys for Appellant
Thomas J. Burns and Aaron R. Harris, Attorneys
for Appellee
JUDGE M ICHELE M. C HRISTIANSEN F ORSTER authored this Opinion,
in which J UDGES D AVID N. M ORTENSEN and R YAN M. HARRIS
concurred.
CHRISTIANSEN FORSTER, Judge:
¶1 	Daniel G. Smith appeals the district court’s finding of
contempt against him, entry of sanctions, entry of final judgment
in 	favor of Cook Martin Poulson 	PC (CMP), and entry of
summary judgment on Smith’s third-party complaint against

Cook Martin Poulson v. Smith
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CMP shareholders Troy Martin, Richard Poulson, Kirk Eck, and
John Adams.1 We reverse in part and affirm in part.
BACKGROUND
¶2 	Smith began working as an accountant for CMP in 1995.
Each 	year 	through 	2004, 	Smith 	signed 	an 	Employment
Agreement. The 2004 agreement permitted Smith’s termination
if 	he 	failed 	“to 	faithfully 	and 	diligently 	perform 	duties 	of
his employment.” It also included a non-compete provision,
which prohibited Smith, for a period of two years following
his termination, from providing “accounting services to any
client 	for 	whom 	[CMP] 	has 	performed 	accounting 	services
during 	the 	twelve-month 	period 	immediately 	preceding 	the
termination of [Smith’s] employment.” The agreement further
provided that in the event Smith breached the non-compete
provision, CMP would be entitled to liquidated damages equal
to 	150% 	of 	what 	it 	had 	billed 	the 	clients to 	whom 	Smith
provided services during the twelve-month period preceding
his termination.
¶3 	In 2005, Smith became one of five shareholders in CMP,
pursuant 	to 	a 	Shareholders’ 	Agreement. 	The 	Shareholders’
Agreement 	granted 	CMP 	the 	“right 	to 	purchase 	all 	of 	[a]
Shareholder’s shares” if the shareholder “engages in one or more
acts 	that 	in 	the 	unanimous 	opinion 	of 	the 	remaining
Shareholders, is discreditable.” The agreement outlined how the
value of the shares would be calculated as well as the manner
and 	timeframe 	in 	which 	the 	buyout 	would 	be 	paid. 	The
agreement also included a non-compete clause in which each
shareholder agreed not to “perform[] accounting services” for
1. Throughout this opinion, we refer to CMP and the third-party
defendants collectively as CMP except where the distinction is
relevant.

Cook Martin Poulson v. Smith
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two years following termination of employment with CMP “to
any 	client 	for 	whom 	[CMP] 	or 	Shareholder 	has performed
accounting services during the five year period immediately
preceding 	the 	termination 	of 	Shareholder’s 	employment.”
Finally, the agreement provided that if a shareholder violated
the non-compete provision after having been bought out under
the discreditable acts provision, “the balance remaining on the
note payable” for the buyout would “be deemed paid in full”
and 	CMP 	would 	“have 	no 	further 	obligation” 	to 	that
shareholder.
¶4 	On July 31, 2014, CMP terminated Smith’s employment
“as a result of [his] failure to diligently perform the duties of his
employment despite repeated requests for improvement and
also as a result of discreditable acts committed by Smith during
his employment with CMP.” Specifically, CMP alleged that
Smith (1) “Submitted falsified production reports and billing
statements”; (2) “Failed to follow CMP’s billing procedures”; (3)
“Failed 	to 	follow 	CMP’s 	written 	and 	institutionalized 	due
diligence protocols”; (4) “Engaged in reckless oversight and
preparation 	of 	tax 	returns, 	schedules, 	audits, 	and 	financial
statements for numerous clients over many years”; (5) “Refused
to comply with demands from other Shareholders that he follow
CMP’s billing procedures, due diligence protocols, and other
policies”; and (6) “Provided accounting services for CMP clients
and non-CMP clients without informing CMP of the work done
while 	utilizing 	CMP-owned 	software, 	hardware, 	and 	other
resources and while not billing those clients[] for the benefit of
CMP, 	but 	instead 	billing 	the 	clients 	directly 	and 	accepting
payment without transferring the funds to CMP.” The other four
shareholders also invoked the discreditable acts provision of the
Shareholders’ Agreement to buy Smith out of his shares.
¶5 	Following Smith’s termination, CMP learned that Smith
was continuing to hold himself out as a CMP employee and was
providing accounting services to a number of CMP clients. In

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December 2014, CMP filed a complaint against Smith requesting
a 	declaratory 	judgment 	regarding 	Smith’s 	obligations 	and
breaches under the Employment and Shareholders’ Agreements;
alleging claims for breach of contract, breach of the implied
covenant of good faith and fair dealing, and breach of fiduciary
duty; 	requesting 	liquidated 	damages 	for 	violation 	of 	the
Employment 	Agreement; 	and 	requesting 	a 	temporary
restraining order (TRO) and injunction prohibiting Smith from
providing 	accounting 	services 	to 	CMP 	clients 	or 	from
influencing any clients of CMP to terminate their relationship
with CMP in violation of the agreements.
¶6 	Smith 	filed 	an 	answer, 	counterclaim, 	and 	third-party
complaint, which purported to add CMP’s shareholders as third-
party defendants. In opposing CMP’s claims, Smith asserted,
among other things, that the claims were barred by CMP’s own
breach of the agreements. Smith’s counterclaim and third-party
complaint asserted that it was CMP and its shareholders who
breached the agreements and their duties of good faith by
improperly 	reducing 	Smith’s 	salary 	and 	distributions 	and
forcing him out of the company. He further asserted that CMP
and its shareholders had unjustly deprived him of his shares in
CMP.
¶7 	On April 15, 2015, the district court issued a TRO
[e]njoining Smith from directly or indirectly, for
himself or any third party, soliciting or having any
contact 	with 	any 	current 	client 	of 	CMP, 	or
soliciting any person, firm, or corporation who was
a customer of CMP within the 12 month period
immediately preceding the termination of Smith’s
employment, with regard to accounting or other
services of the type CMP provides.
The court subsequently held a hearing on CMP’s request for a
preliminary injunction and, in a written memorandum decision,

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granted 	the 	injunction. 	The 	court’s 	memorandum 	decision
stated that Smith was not to “work for, or provide services to,
the 	clients 	[Smith] 	obtained 	while 	he 	was 	employed 	by
[CMP]” and directed CMP’s counsel to prepare an order in
conformance with the court’s memorandum decision. Smith
objected to CMP’s proposed order, and after another hearing,
the court overruled Smith’s objection and entered the order
submitted 	by 	CMP’s counsel. 	Significantly, 	the 	language of
the preliminary injunction order tracked the TRO language
except 	that 	the 	preliminary 	injunction 	order 	expanded 	the
no-soliciting 	restriction 	to 	those 	who 	had 	been 	clients 	for
five 	years 	previous 	to 	Smith’s 	termination 	rather 	than 	just
twelve months.
¶8 	The parties then proceeded with discovery. On March 10,
2016, CMP filed a statement of discovery issues alleging that
Smith’s 	initial 	responses 	to 	its 	discovery 	requests 	“were
incomplete and evasive.” On May 24, 2016, the court ordered
Smith to “provide supplemental responses to his discovery
responses, responding in full to the information requested by
[CMP], within 7 days,” and to “produce all documents that are
responsive 	to 	the 	Requests 	for 	Production 	propounded 	by
[CMP] within 7 days.” At the same time, the court issued a
protective order permitting Smith to designate documents as
confidential and prohibiting use or disclosure of such documents
outside of the litigation.
¶9 	Ten days after the court’s order on discovery issues,
Smith’s counsel contacted CMP’s counsel, offering to “produce
the non-privileged documents . . . at [his] office at a time
which 	is 	convenient.” 	CMP’s 	counsel 	pointed 	out 	that 	the
court’s 	deadline 	had 	passed 	and 	informed 	Smith’s 	counsel
that he expected the documents to be provided as ordered,
but Smith’s counsel continued to insist that the documents
should be inspected on Smith’s computer “as they are kept in
the usual course of business.” CMP’s counsel responded that

Cook Martin Poulson v. Smith
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the 	documents 	should 	be 	“produced 	in 	hard 	copy 	or
electronic format” and requested that Smith’s counsel arrange
for CMP to “image the hard drive” of Smith’s computer. Smith’s
counsel refused to cooperate with this request, and CMP filed a
motion for order to show cause asking that Smith be held in
contempt 	for 	failing 	to 	comply 	with 	the 	court’s 	order 	on
discovery issues.
¶10 	In the meantime, CMP received information indicating
that Smith had “continued to provide accounting services for
several clients of CMP,” allegedly in violation of the court’s TRO
and preliminary injunction order. CMP filed another motion for
order to show cause requesting that Smith be held in contempt
for his violation of these court orders.
¶11 	In 	response, 	Smith 	admitted 	that 	he 	had 	provided
accounting services to over 400 of CMP’s former clients but
maintained that he had not solicited any current CMP client, had
served only “clients who approached him,” and had not yet
invoiced them. He also argued that he had not violated the
injunction, because it was “wrongfully issued,” and asserted that
his actions had not harmed CMP. With respect to the production
of 	documents, 	Smith 	argued 	that 	he 	could 	not 	be 	held 	in
contempt because he had “repeatedly offered to provide CMP’s
counsel access to the computer” but that CMP’s counsel had
“refused 	to 	meet 	to 	inspect 	the 	information 	on 	Smith’s
computer.”
¶12 	The 	court 	was 	unimpressed 	with 	Smith’s 	excuses.
It found that Smith had “blatantly ignored the Court” and
“unashamedly 	admit[ted] 	to 	doing 	so 	because 	he 	felt” 	the
court’s order was “wrongfully entered.” The court stated that
it did “not care if the clients contacted and requested [Smith]
do their accounting, or that [Smith] has not invoiced them for
the 	work 	done.” 	The 	court 	further 	found 	that 	Smith 	had
“ignored 	the 	time 	limitation” 	in 	the 	discovery 	order 	“and

Cook Martin Poulson v. Smith
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refused 	to 	tender 	the 	requested 	documents 	in 	the 	specific
requested form.” The court stated, “Merely providing a one-time
glance at a computer, 10 days after the Court’s order, does
not come close to comporting with [CMP’s] request or the
Court’s order.”
¶13 	Based 	on 	these 	findings, 	the 	court 	held 	Smith 	in
contempt 	and 	imposed 	sanctions. 	Specifically, 	it 	ordered
Smith’s counterclaim stricken from the record, granted CMP
its attorney fees incurred in bringing the motions for order
to 	show 	cause, 	and 	entered 	CMP’s 	proposed 	findings 	of
fact. 	These 	findings 	included 	a 	determination 	that 	Smith
had 	engaged 	in 	the 	discreditable 	acts 	alleged 	by 	CMP 	in
violation of the Shareholders’ Agreement, that CMP followed
the appropriate protocol outlined in the Employment Agreement
in terminating Smith’s employment, that Smith had violated
the 	Employment 	Agreement 	and 	Shareholders’ 	Agreement
by 	providing 	accounting 	services 	to 	CMP 	clients 	after 	his
termination, that his conduct relieved CMP of any obligation
to pay him for his shares, and that the appropriate amount
of damages, pursuant to the liquidated damages provision of
the Employment Agreement, was $448,354. The court entered
final judgment in favor of CMP on its claims and also ordered
that Smith pay CMP’s attorney fees, pursuant to the terms
of 	the 	Shareholders’ 	Agreement, 	which 	provided 	for 	an
award of fees to the “non-defaulting party in enforcing this
Agreement.”
¶14 	Relying 	on 	the 	court’s 	findings, 	the 	third-party
defendants 	also 	moved 	for 	summary 	judgment 	on 	Smith’s
claims against them. The court granted this motion, determining
that 	its findings that 	Smith 	breached 	the 	Employment 	and
Shareholders’ 	Agreements 	precluded 	his 	claims 	against 	the
third-party defendants.
¶15 	Smith now appeals.

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ISSUES AND STANDARDS OF REVIEW
¶16 	Smith first argues that the district court erred by finding
him in contempt for violating the preliminary injunction and for
failing 	to 	comply 	with 	the 	court’s 	discovery 	order. 	“When
reviewing a district court’s decision to find a party in contempt,
we review the district court’s findings of fact for clear error and
its legal determinations for correctness.” Rosser v. Rosser, 2019
UT App 25, ¶ 9, 438 P.3d 1047 (quotation simplified), cert.
granted, 455 P.3d 1055 (Utah 2019). Ultimately, “the decision to
hold 	a 	party 	in 	contempt 	of 	court 	rests 	within 	the 	sound
discretion of the trial court and will not be disturbed on appeal
unless 	the 	trial 	court’s 	action 	is 	so 	unreasonable 	as 	to 	be
classified 	as 	capricious 	and 	arbitrary, 	or 	a 	clear 	abuse 	of
discretion.” Barton v. Barton, 2001 UT App 199, ¶ 9, 29 P.3d 13
(quotation simplified).
¶17 	Smith next asserts that the sanctions imposed for his
violations were unduly harsh. We review the imposition of
contempt 	or 	discovery 	sanctions 	for 	abuse 	of 	discretion.
Kilpatrick v. Bullough Abatement, Inc., 2008 UT 82, ¶ 23, 199 P.3d
957; Barton, 2001 UT App 199, ¶ 9.
¶18 	Finally, 	Smith 	argues 	that 	the 	district 	court’s 	default
findings were insufficient to support the summary judgments
against 	Smith 	on 	CMP’s 	claims 	and 	Smith’s 	third-party
complaint.2 We review a court’s grant of summary judgment for
correctness, viewing “the facts and all reasonable inferences
drawn therefrom in the light most favorable to the nonmoving
2. Smith also asserts that the district court erred in denying his
motion for partial summary judgment and his motion for new
trial. However, his argument on these points is indistinguishable
from his argument regarding the sufficiency of the findings, and
we therefore do not address these points separately.

Cook Martin Poulson v. Smith
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party.” Mind & Motion Utah Invs., LLC v. Celtic Bank Corp., 2016
UT 6, ¶ 15, 367 P.3d 994 (quotation simplified).
¶19 	To the extent that Smith’s arguments were not preserved
in the district court, he has asked us to review them for plain
error. Under plain error review, we will reverse only if “(i) an
error exists, (ii) the error should have been obvious to the trial
court, and (iii) the error is harmful.” In re A.T.I.G., 2012 UT 88,
¶ 22, 293 P.3d 276 (quotation simplified).
ANALYSIS
I. Contempt
¶20 	Smith first asserts that the district court erred in holding
him in contempt because it incorrectly determined that he had
violated the preliminary injunction and discovery order. To
establish contempt, three elements must be proven: (1) “that the
person cited for contempt knew what was required,” (2) that the
person “had the ability to comply,” and (3) that the person
“intentionally failed or refused to do so.” Von Hake v. Thomas, 759
P.2d 1162, 1172 (Utah 1988), superseded by statute on other grounds
as stated in State v. Hurst, 821 P.2d 467 (Utah Ct. App. 1991).
A. 	Violation of Preliminary Injunction
¶21 	On 	appeal, 	Smith 	asserts 	that 	while 	he 	provided
accounting services for former clients, he did not violate the
preliminary injunction because he did not solicit any of CMP’s
clients—he claims they all approached him first—and because
the 	clients 	who 	approached 	him 	were 	all 	former 	(and 	not
current) clients of CMP. He asserts that, with respect to former
clients, the plain language of the injunction precludes him only
from “soliciting,” not from performing any services whatsoever.
He 	maintains 	that 	the 	plain 	language 	of 	the 	preliminary
injunction cannot be read as prohibiting him from performing

Cook Martin Poulson v. Smith
20180488-CA 	10 	2020 UT App 57
accounting services for former clients that he did not actively
solicit and that the court therefore erred when it ruled that the
preliminary injunction ordered Smith “not to do any accounting
work” for former clients.
¶22 	Smith 	did 	not 	preserve this argument 	in 	the 	district
court.3 Although Smith represented to the district court that he
had provided services for only former clients who approached
him first,4 he did not assert, as he now does on appeal, that the
3. Recent decisions from this court have noted that while our
supreme court has acknowledged the “ongoing debate about the
propriety of civil plain error review,” that court has not resolved
the debate for purposes of Utah law. See Utah Stream Access Coal.
v. Orange St. Dev., 2017 UT 82, ¶ 14 n.2, 416 P.3d 553 (questioning
the applicability of civil plain error review); Tronson v. Eagar,
2019 UT App 212, ¶ 18 n.7, 457 P.3d 407 (recognizing that
because the Utah Supreme Court has not yet resolved the debate
about the applicability of plain error review in civil cases, “Utah
appellate courts have sometimes applied plain error review in
civil cases in which neither party challenges its application”);
Frugal Flamingo Quick Stop v. Farm Bureau Mutual Ins. Co., 2018
UT App 41, ¶ 10 n.3, 420 P.3d 57 (applying plain error review in
a civil case without opining on its propriety). While CMP argues
that this court should not reach Smith’s challenge to the district
court’s 	finding 	of 	contempt 	for 	violating 	the 	preliminary
injunction order because this issue was not preserved, CMP has
not challenged the applicability of civil plain error review in this
case. Thus, as we have done before, we decline to resolve that
debate here and proceed to apply plain error review, without
opining on the propriety of doing so. See, e.g., Gerwe v. Gerwe,
2018 UT App 75, ¶ 6 n.1, 424 P.3d 1113.
4. For purposes of our analysis, we accept Smith’s assertions that
he did not solicit former clients and that he did not provide
(continued…)

Cook Martin Poulson v. Smith
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language of the preliminary injunction should be read to permit
him to provide such services so long as he did not “solicit” the
clients. Indeed, he claimed no confusion regarding the intent of
the 	court’s 	order 	and 	acknowledged 	that 	he 	had 	provided
accounting and tax services for former CMP clients. Rather, he
argued to the district court that the preliminary injunction was
improperly entered because he, rather than CMP, owned the
goodwill of the clients for whom he provided services and that
he should not be held in contempt for his violation because he
did not believe CMP had been harmed by his actions. The
district court rejected these arguments, and Smith does not
renew them on appeal.
¶23 	Nevertheless, 	Smith 	asserts 	that 	we 	should 	review
his new argument regarding the language of the injunction
for plain error because he believes it should have been obvious
to the district court that the plain language of the court’s own
injunction order prohibited Smith only from soliciting former
clients, 	not 	from 	providing 	accounting 	services 	to 	former
clients who reached out to him. We agree with Smith that
the district court plainly erred in ruling that Smith violated
the preliminary injunction merely by performing accounting-
related services to CMP’s former clients because, with respect
to 	former 	clients, 	the 	plain 	language 	of 	the 	court’s 	order
prohibits 	Smith 	only 	from 	“soliciting 	any 	person, 	firm, 	or
corporation who was a customer of CMP within the 5-year
period 	immediately 	preceding 	the 	termination 	of 	Smith’s
employment.”
(…continued)
services to any of CMP’s current clients. On remand, the district
court can certainly explore whether these assertions are true. If
the court determines that Smith provided services to CMP’s
current clients or solicited any of CMP’s former clients, it may
elect to reinstate its contempt order.

Cook Martin Poulson v. Smith
20180488-CA 	12 	2020 UT App 57
¶24 	To begin, “we interpret language in judicial documents in
the same way we interpret contract language.” Iota LLC v. Davco
Mgmt. 	Co., 	2016 	UT 	App 	231, 	¶ 	33, 	391 	P.3d 	239. 	“When
interpreting a contract, we look to the language of the contract to
determine its meaning . . . .” Desert Mountain Gold LLC v. Amnor
Energy Corp., 2017 UT App 218, ¶ 13, 409 P.3d 74 (quotation
simplified). The plain language of the preliminary injunction
order does not prohibit Smith from working for or providing
services 	to 	former 	clients 	of 	CMP. 	The 	language 	of 	the
preliminary 	injunction 	order 	instead 	enjoins 	Smith 	from
“soliciting” former clients.
¶25 	The findings and conclusions in the court’s preliminary
injunction ruling stated that the injunction was to “enforc[e] the
covenants 	not 	to 	compete 	found 	in 	the 	employment 	or
shareholder 	agreements” 	to 	prevent 	further 	harm 	to 	CMP
resulting directly from “Smith providing accounting services to
clients of CMP.” They also stated that Smith would be expected
to “compl[y] with the terms of the covenants not to compete,
particularly that he will not work for, or provide services to, the
clients he obtained while he was employed by CMP.” Further,
the court’s memorandum decision following the preliminary
injunction hearing stated that the court intended to enter an
order 	that 	would 	prohibit 	Smith 	from 	“work[ing] 	for, 	or
provid[ing] services to, the clients he obtained while he was
employed by [CMP].” Both the district court and CMP relied on
this 	language 	from 	the 	memorandum 	decision 	and 	the
preliminary injunction’s findings and conclusions to assert that
the injunction required Smith not to work for former clients at
all, regardless of who contacted whom. But we agree with Smith
that this language did not effectively enjoin Smith from working
for former clients, because the language appearing under the
heading “PRELIMINARY INJUNCTION ORDER” enjoined him
only from soliciting former clients and enjoined contact only
with respect to current clients.

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¶26 	This court has determined that “to hold one in contempt
of an order, that order must be clearly understood to be an
order.” Salt Lake City v. Dorman-Ligh, 912 P.2d 452, 455 (Utah Ct.
App. 1996). Accordingly, injunctions must “be specific in terms
and . . . describe in reasonable detail, and not by reference to the
complaint or other document, the act or acts sought to be
restrained.” Utah R. Civ. P. 65A(d). Further, for a violation of an
order to justify sanctions, the “order must be sufficiently specific
and definite as to leave no reasonable basis for doubt regarding
its meaning.” Dorman-Ligh, 912 P.2d at 455. Here, the plain
language under the “PRELIMINARY INJUNCTION ORDER”
heading 	specifically 	prohibited 	Smith 	from 	soliciting 	or
contacting CMP’s current clients and from soliciting CMP’s
former clients.5 It did not prohibit all contact with former clients
or all work for former clients. This portion of the order is the
portion to which a reasonable person would have been expected
to pay attention. Contradictory language in the findings and
conclusions is simply not “sufficiently specific and definite” that
it would have been read as undoubtedly modifying or adding to
the clearly labeled “PRELIMINARY INJUNCTION ORDER.” See
id. This should have been obvious to the district court, and
therefore, it was plain error for the court to find Smith in
5. We agree with Smith that it is notable that CMP’s counsel
drafted 	both 	the 	TRO 	and 	the 	preliminary 	injunction. 	The
language in both orders prohibited Smith from soliciting and
having contact with current clients and from soliciting former
clients. In fact, before the district court entered the preliminary
injunction, Smith objected to the form of the order and proposed
a competing preliminary injunction order that “track[ed] the
language 	set 	forth 	in 	the 	non-compete 	provision.” 	Smith’s
proposed order would have enjoined Smith from “providing
accounting services to any client for whom CMP has performed
accounting services.” But the district court overruled Smith’s
objections and entered the order drafted by CMP.

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contempt for violating the preliminary injunction solely on the
basis that Smith provided services to former clients.
¶27 	CMP 	argues 	that 	Smith 	admitted 	to 	violating 	the
injunction 	when 	he 	acknowledged 	that 	he 	performed
accounting-related 	services 	for 	former 	CMP 	clients. 	But
admitting that he performed the services is not the same as
admitting that he violated the injunction. Smith consistently
maintained that the clients approached him independently and
that he “provided accounting services for certain former CMP
clients . . . who approached him to do the work.” The district
court did not make a finding that Smith worked for current CMP
clients or that he solicited former CMP clients, only that Smith
was 	“ordered 	not 	to 	do 	any 	accounting 	work 	for 	those
individuals.” 	But 	the 	plain 	language 	of 	the 	preliminary
injunction order did not prohibit Smith from working for former
CMP clients, so long as he did not solicit them, and the district
court plainly erred when it determined that Smith’s admitted
actions 	violated 	the 	terms 	of 	the 	preliminary 	injunction.
Accordingly, the court exceeded its discretion in holding Smith
in contempt for violating the preliminary injunction, and we
reverse and remand for further proceedings.
B. 	Violation of Discovery Order
¶28 	Smith next asserts that he did not violate the discovery
order, because he offered to produce the requested documents
on his computer, as they were kept in the usual course of
business. 	The 	court’s 	discovery 	order 	instructed 	Smith 	to
“produce all documents that are responsive to the Requests for
Production 	propounded 	by 	[CMP] 	within 	7 	days.” 	CMP’s
requests for production asked Smith to “make available any
computer” he had “used to provide accounting services to any
person at any time after July 31, 2014,” and also asked him to
provide 	“copies” 	of 	a 	number 	of 	different 	categories 	of
“documents.” In a section of its request defining “document,”

Cook Martin Poulson v. Smith
20180488-CA 	15 	2020 UT App 57
CMP 	asked 	Smith 	to 	provide 	“responsive 	data 	or 	data
compilations kept in electronic form . . . in paper form where
such is possible” or otherwise “downloaded to disk.” Another
provision 	several 	pages 	later 	requested 	that 	Smith 	provide
“documents” “in the precise form and manner as they are kept
in the usual course of business.” It is undisputed that Smith
made no attempt to produce any of the requested documents
within the court’s seven-day deadline and that, subsequently, he
offered only to “meet and confer” at his attorney’s office where
he 	would 	“produce 	the 	non-privileged 	documents” 	by
permitting CMP’s counsel to “inspect the information on Smith’s
computer.”
¶29 	The 	court 	found 	that 	Smith 	had 	“ignored 	the 	time
limitation, and refused to tender the requested documents in the
specific 	requested 	form.” 	The 	court 	found 	that 	CMP 	had
requested that the documents be delivered in paper form or
downloaded to disk and that Smith’s offer to permit CMP “a
one-time glance at a computer” did not comply with the court’s
order.
¶30 	On 	appeal, 	Smith 	asserts 	that 	he 	complied 	with 	the
requests for production by offering to let CMP’s counsel inspect
the documents on his computer because that is how he keeps the
documents “in the usual course of business.” See Utah R. Civ. P.
34(c)(1). In support of this assertion, he relies on rule 34(c) of the
Utah Rules of Civil Procedure and language in CMP’s request
asking that “documents” be provided as “kept in the usual
course of business.”
¶31 	Rule 34(c) of the Utah Rules of Civil Procedure provides,
(c) Form of Documents and Electronically Stored
Information.
(1) A party who produces documents for
inspection must produce them as they are kept in

Cook Martin Poulson v. Smith
20180488-CA 	16 	2020 UT App 57
the usual course of business or must organize and
label them to correspond with the categories in the
request.
(2) If a request does not specify the form or
forms 	for 	producing 	electronically 	stored
information, a responding party must produce the
information in a form or forms in which it is
ordinarily maintained or in a form or forms that
are reasonably usable.
Id. R. 34(c)(1)–(2). Smith seems to be under the impression that
subsection (c)(1) applies to the production of documents stored
on his computer. But in context, it is clear that this provision
applies to hard copy documents, while subsection (c)(2) applies
to electronically stored documents. See, e.g., SolarCity Corp. v.
Doria, No. 16cv3085-JAH (RBB), 2018 WL 467898, at *5 (S.D. Cal.
Jan. 18, 2018) (interpreting identical language used in the Federal
Rules of Civil Procedure as being intended to govern production
of hard copy documents and electronically stored information
separately); Anderson Living Trust v. WPX Energy Prod., LLC, No.
CIV 12-0040 JB/LFG, 2014 WL 930869, at *1, *13 (D.N.M. Mar. 6,
2014) (concluding that the term “documents” as used in rule 34
of 	the 	Federal 	Rules 	of 	Civil 	Procedure 	“does 	not 	include
[electronically 	stored 	information]” 	and 	therefore 	does 	not
require that such information be produced “in the usual course
of business,” and stating that the first subsection “governs hard
copy 	documents” 	while 	the 	second 	“governs 	[electronically
stored information], with no overlap between”).
¶32 	First, 	the 	rule 	distinguishes 	“electronically 	stored
information” as a category separate from “documents.” See Utah
R. Civ. 	P. 34(a)(1) 	(listing 	“documents, 	electronically stored
information, 	[and] 	tangible 	things” 	as 	three 	categories 	of
discoverable 	items). 	Further, 	subsection 	(c)(2), 	pertaining
specifically to production of electronically stored information,

Cook Martin Poulson v. Smith
20180488-CA 	17 	2020 UT App 57
would 	be 	rendered 	meaningless 	if 	“electronically 	stored
information” were subsumed by the definition of “documents,”
since 	production 	of 	documents 	is 	already 	governed 	by
subsection (c)(1). See Hall v. Utah Dep’t of Corr., 2001 UT 34, ¶ 15,
24 	P.3d 	958 	(explaining 	that 	when 	we 	engage 	in 	statutory
interpretation, we “seek to render all parts [of the provision]
relevant and meaningful” and “avoid interpretations that will
render 	portions 	of 	a 	statute 	superfluous 	or 	inoperative”
(quotation simplified)). Thus, under rule 34(c)(2), Smith was
required 	to 	produce the 	electronic information 	in 	the 	form
requested by CMP or, if CMP did not specify, then the form
“ordinarily maintained” or “reasonably usable.” See Utah R. Civ.
P. 34(c)(2).
¶33 	Smith alternatively asserts that permitting CMP to look
at 	the 	files 	on 	the 	computer 	complied 	with 	CMP’s 	own
request 	that 	he 	provide 	“documents” 	“in 	the 	precise 	form
and 	manner 	as 	they 	are 	kept 	in 	the 	usual 	course 	of
business.” However, CMP also requested that all “responsive
data or data compilations[6] kept in electronic form . . . be
produced 	in 	paper 	form 	where 	such 	is 	possible 	. 	. 	. 	[or]
downloaded to disk.” Unlike rule 34, CMP’s request explicitly
included “all electronic information in all electronic storage
media” in the definition of “documents.” Nevertheless, reading
the request as a whole, we agree with the district court that
Smith 	should 	have 	understood 	that 	CMP 	was 	requesting
6. 	Smith 	asserts 	that 	the 	files 	on 	his 	computer 	could 	not
be 	considered 	“data 	or 	data 	compilations.” 	(Quotation
simplified.) 	However, 	he 	makes 	no 	attempt 	to 	define 	this
term 	or 	explain 	why 	the 	electronic 	files 	would 	not 	fall
within 	this 	definition. 	See 	Data, 	Merriam-Webster.com,
merriam-webster.com/dictionary/data 	[https://perma.cc/35EE-
LZD6] (defining data as “information in digital form that can
be transmitted or processed”).

Cook Martin Poulson v. Smith
20180488-CA 	18 	2020 UT App 57
electronic information to be provided in paper or disk form. The
more specific request regarding “data and data compilations”
followed immediately after the language defining documents to
include 	electronic 	information, 	whereas 	the 	usual-course-of-
business 	language 	was 	included 	in 	a 	boilerplate 	paragraph
several pages later. And as with rule 34, the inclusion of this
separate instruction regarding electronic information would be
superfluous and meaningless if we were to interpret the request
as Smith suggests.
¶34 	Additionally, as noted above, CMP’s request asked Smith
to provide “copies” of the requested documents. And CMP
specifically identified the categories of documents that it wanted
copies of. Smith could not have reasonably interpreted this
request as one to merely view the documents on his computer;
the specific request for copies made it clear that CMP was
requesting the documents in a portable format.
¶35 	The court’s discovery order instructed Smith to “produce
all documents that are responsive to the Requests for Production
propounded by [CMP] within 7 days.” CMP’s request clearly
asked for copies of electronic documents to be provided in
paper format or on a disk. Yet Smith 	ignored the request
and refused to provide the documents in any format other
than viewed directly on his computer.7 This was inconsistent
with 	the 	court’s 	order. 	Thus, 	the 	court 	did 	not 	exceed 	its
discretion 	in 	holding 	Smith 	in 	contempt 	for 	violating 	the
discovery order.
7. Smith also makes much of CMP’s request that he deliver the
entire computer hard drive for copying, asserting that this was
not required by the court order. But the court did not base its
determination on Smith’s failure to deliver the hard drive; it
based its determination on Smith’s complete refusal to deliver
any of the documents to CMP in either paper or disk form.

Cook Martin Poulson v. Smith
20180488-CA 	19 	2020 UT App 57
II. Sanctions
¶36 	Smith asserts that the sanctions imposed for his violations
of the preliminary injunction and the discovery order were
excessive and exceeded the district court’s discretion. Rule 37 of
the Utah Rules of Civil Procedure permits courts to “impose
appropriate sanctions for the failure to follow its orders.” Utah
R. Civ. P. 37(b). In doing so, the court may
(1) deem the matter or any other designated facts
to be established in accordance with the claim or
defense of the party obtaining the order;
(2) prohibit the disobedient party from supporting
or opposing designated claims or defenses or from
introducing designated matter into evidence;
. . .
(4) dismiss all or part of the action, strike all or part
of the pleadings, or render judgment by default on
all or part of the action; [and]
(5) order the party or the attorney to pay the
reasonable 	costs, 	expenses, 	and 	attorney 	fees,
caused by the failure
. . . .
Id. “The striking of pleadings, entering of default, and rendering
of judgment against a disobedient party are the most severe of
the 	potential 	sanctions 	that 	can 	be 	imposed 	upon 	a
nonresponding party.” Marshall v. Marshall, 915 P.2d 508, 515
(Utah Ct. App. 1996) (quotation simplified). Though we affirm
the district court’s determination that Smith violated the court’s
discovery order, we hold that the district court exceeded its
discretion 	in 	holding 	Smith 	in 	contempt 	for 	violating 	the

Cook Martin Poulson v. Smith
20180488-CA 	20 	2020 UT App 57
preliminary 	injunction 	based 	solely 	on 	a 	finding 	that 	he
provided accounting services to former clients. There is no way
for this court to know whether the district court would have
employed the same sanction based on the discovery violations
alone. Because it is possible that the court would have entered
other sanctions in response to the discovery violation alone, we
must reverse the sanctions and remand for further proceedings.8
III. Summary Judgment
¶37 	Because summary judgment was based on the default
findings that were imposed as a sanction, and we are unable to
affirm the sanctions, we must necessarily also reverse the court’s
summary judgment rulings and its order regarding attorney
fees. Nevertheless, as the summary judgment issues raised on
appeal would arise on remand in the event that the district court
8. We stop short of addressing the question of whether striking
Smith’s counterclaims based on the discovery violation alone
would be an abuse of discretion. We note, however, that district
courts 	have 	wide 	discretion 	in 	such 	cases, 	see 	Kilpatrick 	v.
Bullough 	Abatement, 	Inc., 	2008 	UT 	82, 	¶ 	23, 	199 	P.3d 	957
(“[D]istrict 	courts are 	granted 	a 	great 	deal 	of 	deference 	in
selecting discovery sanctions, and we overturn a sanction only in
cases evidencing a clear abuse of discretion.”), and that Utah
courts have affirmed harsh sanctions for discovery violations in
other cases, see, e.g., First Fed. Sav. & Loan Ass’n of Salt Lake City v.
Schamanek, 684 P.2d 1257, 1266–67 (Utah 1984) (upholding a
decision to strike pleadings where the defendant claimed the
requested information was privileged but failed to establish that
a privilege applied); Wright v. Wright, 941 P.2d 646, 647, 650
(Utah Ct. App. 1997) (affirming a court’s decision to strike wife’s
answer and counter-petition in a divorce proceeding based on
her failure to respond to discovery requests even though her
counsel had withdrawn).

Cook Martin Poulson v. Smith
20180488-CA 	21 	2020 UT App 57
reinstates its sanctions order based on appropriate findings, we
elect to address those issues here.
¶38 	Smith argues that the district court erred in entering
judgment in favor of CMP on its breach-of-contract claims and in
granting 	the 	third-party 	shareholders’ 	summary 	judgment
motion, because its default findings did not establish all the
elements of breach of contract. To establish a prima facie case for
breach of contract, a plaintiff must establish “(1) a contract, (2)
performance by the party seeking recovery, (3) breach of the contract
by the other party, and (4) damages.” Bair v. Axiom Design, LLC,
2001 UT 20, ¶ 14, 20 P.3d 388 (emphasis added) (quotation
simplified), abrogated on other grounds as recognized by A.S. v. R.S.,
2017 UT 77, 416 P.3d 465. Smith asserts that the district court’s
default 	findings 	did 	not 	include 	a 	finding 	that 	CMP 	had
performed under the contracts and that the court’s summary
judgment ruling was therefore erroneous.
¶39 	“Generally, 	when 	a 	trial 	court 	fails 	to 	make 	factual
findings on a material issue, such failure constitutes reversible
error . . . .” Uhrhahn Constr. & Design, Inc. v. Hopkins, 2008 UT
App 41, ¶ 29, 179 P.3d 808. Nevertheless, “missing findings can
be viewed as harmless error” if “the undisputed evidence clearly
establishes the factor or factors on which findings are missing”
or “if it is reasonable to assume that the trial court actually
considered the controverted evidence and necessarily made a
finding to resolve the controversy, but simply failed to record
the factual determination it made.” Hall v. Hall, 858 P.2d 1018,
1025 (Utah Ct. App. 1993) (quotation simplified).
¶40 	The court found that Smith engaged in “discreditable acts
as contemplated by” the Shareholders’ Agreement; that CMP
“followed the exact protocol contemplated by” the Employment
Agreement in terminating Smith; that “Smith’s conduct, both
before and after his termination, breached his obligations under
the Shareholders’ Agreement”; and that “Smith’s conduct after

Cook Martin Poulson v. Smith
20180488-CA 	22 	2020 UT App 57
his termination breached his obligations under the Employment
Agreement.” We agree with CMP that the default findings can
be construed as determining that CMP did not breach the
Employment Agreement; however, they cannot be construed as
determining 	that 	CMP 	did 	not 	breach 	the 	Shareholders’
Agreement.
¶41 	With respect to the Employment Agreement, it can be
inferred 	from 	the 	court’s 	findings 	that 	CMP 	followed 	the
appropriate protocol in terminating Smith and that CMP did not
breach the Employment Agreement. Thus, such findings could
adequately support a determination that CMP established its
breach of contract claim on the Employment Agreement.9 The
non-compete sections of the Employment Agreement provide
for an award of “liquidated damages in the amount of one
hundred fifty percent (150%) of the billings by [CMP] to the
clients 	during 	the 	12-month 	period 	immediately 	preceding
termination for those clients to whom Employee has rendered
service subsequent to Employee’s termination.” Because the
default findings support a ruling in favor of CMP on its claim for
breach of the Employment Agreement, such findings could also
support an award of liquidated damages.
¶42 	With 	respect 	to 	the 	Shareholders’ 	Agreement, 	Smith
asserted 	in 	his 	pleadings 	that 	CMP 	and 	the 	individual
shareholders violated the Shareholders’ Agreement in January
2014 	by 	reducing 	his 	shareholder 	distributions 	and 	salary,
increasing the other shareholders’ distributions, and refusing “to
allow Smith to serve as a director.” He also asserted that they
9. Smith does not appear to have actually asserted that CMP or
the shareholders breached the Employment Agreement. Rather,
his argument rested on his assertion that he was no longer
subject to the Employment Agreement after the Shareholders’
Agreement went into effect.

Cook Martin Poulson v. Smith
20180488-CA 	23 	2020 UT App 57
breached 	the 	Shareholders’ 	Agreement 	by 	terminating 	his
employment. While the district court’s default findings stated
that Smith violated the Shareholders’ Agreement prior to his
termination in July 2014, thus precluding his assertion that his
termination was itself a breach of the agreement, it is not clear
whether Smith’s violations occurred prior to January 2014, and
the district court made no findings regarding Smith’s allegation
that 	CMP and 	the 	shareholders breached 	the 	Shareholders’
Agreement in January 2014. Thus, the default findings could not
establish that CMP or the individual shareholders performed
under 	the 	Shareholders’ 	Agreement. 	Without 	such 	a
determination, the court could not rule in favor of CMP on its
claim for breach of the Shareholders’ Agreement. Likewise, these
findings could not resolve Smith’s third-party complaint against
the individual shareholders, which also rested on his assertion
that they had breached the Shareholders’ Agreement in January
2014.
IV. Fees on Appeal
¶43 	CMP has requested an award of fees on appeal. “[W]hen a
party who received attorney fees below prevails on appeal, the
party is also entitled to fees reasonably incurred on appeal.”
Brown v. Richards, 840 P.2d 143, 156 (Utah Ct. App. 1992).
Because we must reverse the court’s sanctions and summary
judgment on the basis that its contempt order was plainly
erroneous, CMP has not prevailed on appeal, and its request for
fees is therefore denied.
CONCLUSION
¶44 	Though the district court did not exceed its discretion in
holding Smith in contempt for violating the court’s discovery
order, 	the 	district 	court 	plainly 	erred 	in 	interpreting 	the
language of its own preliminary injunction order and did exceed
its discretion in holding Smith in contempt for violating that

Cook Martin Poulson v. Smith
20180488-CA 	24 	2020 UT App 57
order solely based on a finding that he worked for former
clients. Because we cannot say whether the district court would
have imposed the same sanctions based only on the discovery
violation, we reverse the district court’s ruling in favor of CMP
and remand for further proceedings consistent with this opinion.