“Solicitation Requires an Overt Act”
Idaho Supreme Court Clarifies Enforcement of Non-Solicitation Covenants, Preliminary Injunction Standards, and Contempt Procedure
(Insure Idaho, LLC v. Horn, 173 Idaho ___, 544 P.3d ___ (2025))

I. Introduction

Insure Idaho, LLC v. Horn is a multi-faceted decision in which the Idaho Supreme Court:

• Repudiates the notion that simply accepting business from a former customer is tantamount to “solicitation.”
• Sets clear guideposts for trial courts issuing preliminary injunctions under Idaho Rule of Civil Procedure 65(e)(1)–(2).
• Invalidates contempt findings entered when the court lacks lawful authority to impose any sanction.

The litigation began after former employee Claudia Horn joined a competing insurance brokerage and several Spanish-speaking customers followed her. Insure Idaho obtained a preliminary injunction prohibiting “solicitation,” and when another customer left, the district court found Horn — but not her new employer, Henry Insurance Agency, LLC — in contempt. The Supreme Court reversed the contempt judgment, vacated the injunction, and remanded, while simultaneously affirming dismissal of contempt claims against Henry Insurance and upholding its fee award.

II. Summary of the Judgment

1. Contempt Reversed. A court may not conduct a contempt trial when it lacks power to impose either civil or criminal sanctions. Here, alleged conduct (“doing what the injunction forbade”) could only be punished criminally, yet criminal-procedure safeguards were absent.
2. Solicitation Defined. “Solicitation” requires an overt act that entreats, petitions, or urges a customer to do business; mere acceptance of voluntarily offered business is not solicitation.
3. Preliminary Injunction Vacated. Granting relief without analyzing all elements of at least one pleaded cause of action, and without applying the above definition of solicitation, violated Rule 65(e).
4. Henry Insurance Dismissal & Fees Affirmed. HF Construction was not among the customers covered by the injunction; Insure Idaho failed to challenge all alternative bases for dismissal; fees to Henry Insurance were proper.
5. Attorney Fees. Horn and Henry Insurance awarded fees below and on appeal (as to contempt issues); further fee issues reserved for remand.

III. Detailed Analysis

A. Precedents Cited and Their Influence

• Camp v. East Fork Ditch Co. (2002) – Distinguished between civil and criminal contempt; adopted here to demonstrate why only criminal sanctions were available.
• Planned Parenthood Great NW v. State (2022) – Supplies conjunctive test for preliminary injunctions (likelihood of success + irreparable harm); the district court’s omission of the first prong mandated reversal.
• Snap! Mobile, Inc. v. Vertical Raise, LLC (2024) – Clarified appellate review of contempt and Rule 75 procedures; reinforced that merits of injunctions can be reviewed through I.A.R. 17(e)(1).
• Carr v. Pridgen (2014) & Abell v. Abell (2023) – Provided standards of review (substantial evidence & de novo for legal issues) and proper Rule 75 charging-affidavit requirements.
• R. Homes Corp. v. Herr (Idaho Ct. App. 2005) – Prior Idaho authority implying initiation is crucial to “solicitation”; the Court expands and formalizes this concept.
• Out-of-state authority (e.g., Mona Electric, Corporate Technologies, Bessemer Trust) examined to choose a “totality of circumstances” over a rigid initiation test, yet still requiring an overt act.

B. The Court’s Legal Reasoning

1. Lack of Sanction = No Contempt Trial. Because Horn’s alleged violation was historical (irremediable), any sanction would be criminal. Absent safeguards (proof beyond reasonable doubt, right to jury, etc.) the court possessed no lawful power to punish. Proceeding anyway was an abuse of discretion.
2. Solicitation Standard Articulated.
   • Plain meaning from Black’s and C.J. references: an intentional, affirmative overture.
   • Totality-of-circumstances approach: initiation of contact is “key” but not dispositive; courts evaluate industry context, nature of communications, and customer independence.
   • Acceptance ≠ solicitation; communication alone ≠ solicitation; inferences cannot be premised solely on lost customers.
3. Rule 65(e) Conjunctive Test Rigor. The issuing court must:
   1. Identify every pleaded claim;
   2. Assess each element for likelihood of success;
   3. Then analyze irreparable harm.
   Focusing solely on enforceability of the covenant ignored breach, interference, and causation elements.
4. Overbreadth & Third-Party Restraint. Enjoining Henry Insurance without showing contractual privity or “active concert” status rendered relief broader than necessary and unlawfully restrained lawful competition.

C. Anticipated Impact

1. Covenant Drafting & Enforcement
   • Employers must include explicit language if they wish to bar passive acceptance of business — otherwise ex-employees may serve customers who independently transfer.
   • Key-employee determinations remain important, but how a covenant is breached is now scrutinized with new clarity.
2. Litigation Strategy
   • Parties seeking injunctive relief must marshal evidence on each claim element, not just contract validity.
   • Rule 75 contempt movants must request sanctions that the court is empowered (procedurally and constitutionally) to impose, or risk dismissal and fee exposure.
3. Judicial Economy & Appellate Practice
   • Affirms broad sweep of I.A.R. 17(e)(1): a valid appeal of a final order brings all prior interlocutory orders along, discouraging piecemeal litigation.
   • Trial courts instructed to avoid “moot-court” contempt trials that consume resources without potential remedy.

IV. Complex Concepts Simplified

Non-Solicitation vs. Non-Competition

Non-solicitation bars targeted outreach to certain customers; non-competition bars working in the same line of business or geographic area. The contract here only restricted solicitation.

Overt Act

Some affirmative step (call, email, meeting request, inducement) aimed at attracting the customer. Passive responses or fulfilling customer-initiated requests are not overt acts.

Civil v. Criminal Contempt

Civil contempt uses “conditional” penalties coercing future compliance (e.g., daily fine until obeyed). Criminal contempt imposes “unconditional” punishment for past acts (fixed fine or jail). Because Horn’s conduct couldn’t be undone, only criminal sanctions were possible.

Purge or Ability to Purge

The contemnor’s power to avoid or end sanctions by doing (or refraining from) something. Without such power, sanctions are criminal.

Idaho Rule of Civil Procedure 65(e)

Specifies five grounds for preliminary injunctions. Subsections (1) and (2) collectively require (i) probability of success on the merits, and (ii) irreparable harm absent relief. Both must be addressed.

Idaho Appellate Rule 17(e)(1)

On appeal from a final order, all earlier interlocutory orders are automatically before the Supreme Court; no separate notice needed.

V. Conclusion

Insure Idaho v. Horn re-draws the Idaho map for enforcing restrictive covenants and wielding equitable remedies:

• “Solicitation” now demands an overt, affirmative act; courts must examine the totality of circumstances and cannot punish mere acceptance of migrating customers.
• Trial courts must rigorously apply the dual prerequisites of Rule 65(e) and articulate how each claim’s elements are likely to be proven before restraining conduct.
• Contempt power is potent but bounded: absent capacity to impose lawful sanctions, courts must abstain from conducting contempt trials.
• Third-party competitors cannot be enjoined merely by proximity; enforceability and active-concert findings are prerequisites.
• Finally, the decision underscores the financial risks of over-reaching: prevailing parties may recoup significant attorney fees when improper injunctions and contempt motions are pursued.

With these clarifications, Idaho joins a growing body of jurisprudence that balances legitimate business interests with employee mobility and fair competition, while insisting on disciplined judicial procedure.