Opinion ID: 220657
Heading Depth: 1
Heading Rank: 6

Heading: Transfer of assets in violation of 6/26/08 injunction

Text: Donald Bowers next contends that, contrary to the district court's findings in its August 13, 2010 civil contempt order and memorandum decision, he did not violate the terms of the district court's June 26, 2008 TRO because he never transferred any assets from WideBand to WideBand Georgia. [4] In support, Donald Bowers argues that: (a) the district court erred in inferring that WideBand Georgia received monies from WideBand; (b) the district court erred in allowing ClearOne to misconstrue the testimony of Lonny Bowers as meaning that WideBand G[eorgia] was a `distributor' for WideBand, Aplt. Br. at 39; (c) ClearOne never established any relationship whatsoever between [Donald] Bowers and [the Chinese company] Longoo, and in fact sworn testimony clearly showed that neither DialHD nor WideBand Georgia had any dealings with the Chinese company, id. at 40; and (d) neither ClearOne nor the Trial Court definitively established the existence of a `common scheme' within the meaning of Fed. R.Civ.P. 65 as to the `Longoo' matter, given that ... ClearOne's examinations of DialHD's and Longoo's equipment were grossly inaccurate, id. at 39-40. We conclude, however, that these arguments lack merit. It was undisputed that WideBand Georgia, which Donald Bowers created in June of 2008, received approximately $1.36 million in deposits from some source between the time of its incorporation and September 30, 2009. Neither Donald Bowers nor the WideBand defendants, however, ever produced any evidence explaining the source of these deposits, despite discovery orders issued by the district court directing them to do so. This stonewalling on the part of the WideBand defendants and Donald Bowers, combined with substantial evidence indicating that WideBand Georgia was intimately involved with the business of WideBand and the other WideBand defendants (including continuing to sell infringing products, paying WideBand's expenses, and funneling money to the WideBand defendants and Donald Bowers), was more than sufficient to allow the district court to infer that WideBand was the source of the $1.36 million in deposits received by WideBand Georgia. We likewise conclude that the district court did not err in construing Lonny Bowers' testimony to mean that WideBand Georgia acted as a distributor for WideBand. At the November 9, 2009 show cause hearing, Lonny Bowers testified that WideBand Georgia, using WideBand's employees, sold WideBand's products and returned some or all of the sales proceeds to WideBand. JA at T5147-48. Moreover, other evidence in the record, including check records from WideBand Georgia, supported Lonny Bowers' testimony. Thus, the district court's factual finding was not clearly erroneous. [5] As for Donald Bowers' two arguments concerning his connection, or lack thereof, to the Chinese company Longoo, he offers no explanation as to how this relates to the district court's finding that he violated the terms of the June 26, 2008 order prohibiting him from diverting WideBand's assets into WideBand Georgia. Thus, we find it unnecessary to address these arguments in detail. In connection with his challenge to the district court's findings that he violated the terms of the June 26, 2008 TRO, Donald Bowers separately argues that the district court committed reversible error to the extent that it based its findings of contempt upon alleged monetary asset transfers between WideBand ... and WideBand G[eorgia]. Aplt. Br. at 43. According to Donald Bowers, the district court lacked the authority to impose any type of pre-judgment asset-freezing order on WideBand or WideBand Georgia because no nexus of any kind existed between the assets of those two companies and the equitable relief sought, and ClearOne had no lien or equitable interest in the companies' monetary funds. Id. The threshold problem with this argument is that Donald Bowers fails to cite to where, if at all, in the voluminous record on appeal that he raised this argument and that the district court ruled on it. See 10th Cir. R. 28.2(C)(2) (For each issue raised on appeal, all briefs must cite the precise reference in the record where the issue was raised and ruled on.). Consequently, we are under no obligation to address his argument on the merits. See Adler v. Wal-Mart Stores, Inc., 144 F.3d 664, 679 (10th Cir.1998) (Arguments inadequately briefed in the opening brief are waived....). Even overlooking this deficiency, we conclude there is no merit to Donald Bowers' argument. In its original and subsequent amended complaints, ClearOne consistently sought equitable relief in the form of the return of the trade secret, i.e., the Honeybee Code, that had been purportedly misappropriated by the WideBand defendants. The district court's June 26, 2008 preliminary injunction, which prohibited WideBand from transferring the Honeybee Code or any related items to WideBand Georgia, was obviously and reasonably aimed at preserving the status quo so that, in the event ClearOne ultimately prevailed on its misappropriation claims, its request for equitable relief would not have been rendered moot. See De Beers Consol. Mines v. United States, 325 U.S. 212, 219, 65 S.Ct. 1130, 89 L.Ed. 1566 (1945) (In truth the purpose and effect of the injunction is to provide security for performance of a future order which may be entered by the court.); id. at 220, 65 S.Ct. 1130 (A preliminary injunction is... appropriate to grant intermediate relief of the same character as that which may be granted finally.).