ADT Security Services, Inc. v. Security One International, Inc. et al

Filing 371

ORDER ENTERING STIPULATED INJUNCTION, VACATING COMPLIANCE HEARING, AND DISMISSING CASE. Signed by Judge Yvonne Gonzalez Rogers on 10/1/2013. (Attachments: # 1 Exhibit)(fs, COURT STAFF) (Filed on 10/1/2013)

SETTLEMENT AGREEMENT
This Settlement Agreement (“Agreement”) is made this 23d day of September,
2013, by and between ADT LLC, a Delaware limited liability company with its principal place
of business located at 1501 Yamato Road, Boca Raton, Florida 33431 (“ADT”), and Security
One International, Inc., a California corporation with its principal place of business located at
11601 Wilshire Boulevard, Suite 500, Los Angeles, California 90025 (“Security One”) (with
ADT, the “Parties”).
WHEREAS, ADT owns rights in and to various ADT® marks in the United
States, including, but not limited to, the following Trademarks registered with the United States
Patent and Trademark Office: Nos. 710,708; 3,445,423; and 3,485,321; and
WHEREAS, ADT filed a lawsuit against Security One and others (“Defendants”)
in the United States District Court for the Northern District of California, Oakland Division,
(“Court”) entitled ADT Security Services, Inc. v. Security One Int’l, Inc., et al., No. 4:11-CV05149 (the “Action”), alleging, inter alia, that Defendants had engaged in false statements and
unfair and deceptive trade practices in the sale of alarm systems that have caused confusion
among ADT customers in violation of Section 43(a) the Lanham Act and California common
law; and
WHEREAS, Security One denies ADT’s claims and does not hereby admit any
liability; and
WHEREAS, in the Action, the parties stipulated to, and the Court entered, a
preliminary injunction that barred the Defendants from employing certain false claims and
deceptive sales practices while the action remained pending (“Preliminary Injunction”); and
WHEREAS the Parties now desire to settle and resolve all claims that were
asserted in the Action,

NOW, THEREFORE, for good and valuable consideration, the receipt and
adequacy of which is hereby acknowledged, the Parties agree as follows:
1.

Agreed Injunction. Upon execution of this Agreement, the Parties will

submit an Agreed Permanent Injunction in the form attached as Exhibit A to this Agreement
(“Permanent Injunction”) to the Court for entry. The Parties agree that the Court will have
for ten years
continuing and exclusive jurisdiction to hear and decide all matters relating in any respect to the
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Injunction. The Parties further agree that the existing Stipulated Preliminary Injunction shall be
immediately dissolved upon entry of the Permanent Injunction.
2.

Payment to ADT. In complete satisfaction of all ADT claims alleged in

the Complaint, and all other claims released herein, Security One’s insurer shall pay to ADT the
total sum of $1,500,000, on or before September 26, 2013 (“Payment”). Security One shall not
contribute to the settlement amount under this Agreement.
3.

Dismissal. Upon the execution of this Agreement, the Parties will read

this Agreement into the record in the Court, and the parties will adjourn the further trial of this
matter and the pending hearing on ADT’s motion for Defendants’ alleged contempt of the
Preliminary Injunction. Upon entry of the Permanent Injunction by the Court, and receipt of the
Payment, the Parties will move the Court to dismiss the Action and the contempt proceeding
with prejudice, with each side to bear its own costs.
4.

Release. ADT hereby releases Security One and its officers, employees,

affiliated entities, independent contractors, insurers, successors and assigns of all claims that
ADT may possess against them, known or unknown, asserted or unasserted, as of the date of this
Agreement. ADT expressly reserves and does not release any or all claims it may possess
against defendants Scellusaleads or Pure Clar. Security One hereby releases ADT and its

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officers, employees, affiliated entities, independent contractors, insurers, successors and assigns
of all claims that the Defendants may possess against them, known or unknown, asserted or
unasserted, as of the date of this Agreement.
5.

Representations and Warranties. The Parties represent and warrant to

each other that they are the owners of the claims that each releases under this Agreement, and
that they have not conveyed or assigned their respective interests in any such claims to others.
Security One represents and warrants that it does not knowingly possess confidential proprietary
ADT customer information, and that it has no access to any electronic ADT database. ADT
represents and warrants that ADT has made no claim, as of the date of this agreement, that
Security One possesses proprietary ADT customer information, or that Security One has access
to any electronic ADT customer database. The parties acknowledge that Security One buys sales
leads from vendors, and that Security One is in no way affiliated with these vendors.
6.

No Confidentiality. The Parties agree that the Agreement and its terms are

not confidential, and that ADT may disclose this Agreement without limitation or restriction.
7.

Governing Law; Forum. This Agreement shall be governed by and

construed in accordance with California law, without regard to conflict of law principles. The
Parties hereby submit to the exclusive jurisdiction of the United States District Court for the
Northern District of California, Oakland Division (Rogers, J.), with respect all matters arising
from this Agreement, including without limitation the interpretation and enforcement of the
provisions of this Agreement, the representations herein, or the Permanent Injunction, or any
litigation arising hereunder. The Parties agree to waive any right to a jury trial of the claims and
defenses asserted in any litigation arising from this Agreement or the Injunction. The Parties

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agree that the prevailing party in any litigation brought under this Agreement or the Injunction
shall be awarded its attorney fees and all costs of suit incurred in the litigation.
8.

Entire Agreement; No Oral Modifications. This Agreement is the entire

agreement between the Parties with respect to the subject matter herein and may be amended
only in a writing signed by all Parties. This Agreement shall be binding upon and inure to the
benefit of the Parties and their respective parents, subsidiaries, affiliates, successors in interest
and associated entities and each of their owners, officers, directors, partners, employees, agents,
representatives, attorneys, licensees, predecessors, successors, heirs, and assigns.
9.

Enforceability; Authority of Parties and Signators. The Parties signing

this Agreement represent and warrant that they each have the authority to sign on behalf of the
respective Parties and that no other signature, act or authorization is necessary to make this
Agreement binding on the Parties.
10.

Counterparts. This Agreement may be executed in counterparts, the

signed copies of which, taken together, shall be deemed an original.
11.

Notice. Any notices, responses, or confirmations required by this

Agreement or the Injunction shall be deemed sufficiently given if in writing and both personally
served to the notified Party and deposited in an official depository of the United States Postal
Service in registered or certified form with return receipt requested, or through commercial
carrier with return receipt requested, addressed to the notified Party at the address set forth
below, with a copy by email, as may be changed from time to time by written notice:

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To ADT:
ADT LLC
Attn: General Counsel & Chief Litigation Counsel
1501 Yamato Road
Boca Raton, FL 33431
Email: [e-mail]
[e-mail]
with a copy to
C. Sanders McNew, Esquire
McNEW P.A.
2385 NW Executive Center Drive, Suite 100
Boca Raton, FL 33431
Email: [e-mail]
To Security One:
Security One International, Inc.
11601 Wilshire Boulevard, Suite 500
Los Angeles, California 90025
Email: [e-mail]
with a copy to
John O’Bryan, Esquire
FREEBORN & PETERS LLP
311 South Wacker Drive, Suite 3000
Chicago, Illinois 60606
Email: [e-mail]
12.

Right to Review; Informed Consent. The Parties hereby affirm the

following:
a.

that they fully understand the meaning, intent and content of this

Agreement and Injunction;
b.

that they have had a reasonable period of time to consider this

Agreement and Injunction, and to fully discuss and review the terms of this Agreement and
Injunction with their attorneys; and

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EXHIBIT A

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UNITED STATES DISTRICT COURT

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NORTHERN DISTRICT OF CALIFORNIA – OAKLAND DIVISION

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ADT SECURITY SERVICES, INC.,

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Plaintiff,
vs.

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PERMANENT INJUNCTION

SECURITY ONE INTERNATIONAL, INC.,
and CLAUDIO HAND,
Defendants.

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CIVIL ACTION No. C 11-05149 YGR

After considering the parties’ submissions as part of the parties’ agreement to settle the
claims asserted in this action, IT IS HEREBY ORDERED THAT the following stipulated
Permanent Injunction be, and hereby is, ENTERED, as follows:
1.

Defendants SECURITY ONE INTERNATIONAL, INC. (“SECURITY ONE”),

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and CLAUDIO HAND (collectively, “Defendants”), and their respective owners, members,

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managers, agents, servants, employees, independent contractors, telemarketers, officers, directors,

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attorneys, partners, subsidiaries, successors and assigns, or any transferee of the businesses or

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assets of either Defendant (collectively, “Enjoined Persons”), and those acting in active concert

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with any of them, be and hereby are immediately and permanently hereafter ENJOINED with
respect to the plaintiff, ADT LLC, doing business as ADT SECURITY SERVICES, INC., and its
affiliated entities, successors and assigns, (“ADT”) from making the following false
representations or engaging in the following conduct:
(a)

Informing ADT customers that ADT has authorized SECURITY

ONE to take over or handle the accounts or technical support service for ADT customer accounts;

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PERMANENT INJUNCTION

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(b)

ADT and is ADT’s new security service provider;

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Informing ADT customers that SECURITY ONE has “bought out”

(c)

Informing ADT customers that ADT is not capable of handling its

existing clients and therefore is giving SECURITY ONE ADT customer accounts;

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(d)

Representing to ADT customers that SECURITY ONE is affiliated

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with ADT and that ADT has authorized SECURITY ONE to provide an “upgrade” to the

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customer’s ADT security system;

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(e)

to SECURITY ONE to receive a better rate;

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(f)

Making any false statement that SECURITY ONE is an agent of

(g)

Making a false statement to any ADT customer that ADT no longer

ADT;

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Informing ADT customers that ADT is transferring select accounts

is doing business, or has limited or eliminated any services;

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(h)

Making any material false statement of fact regarding ADT

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including, but not limited to, function, performance, capabilities, specifications, features,

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requirements, reliability, availability, origin, sponsorship, approval, or design of any ADT

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equipment, alarm systems, sales, or service;

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(i)

Making calls by telephone to any ADT call center or customer

support hotline and posing as an ADT customer or potential customer;

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(j)

Making any false representation to any ADT customer while

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soliciting the customer’s business, including without limitation, as it relates to their relationship

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and/or affiliation with the manufacturer of the customer’s alarm system equipment (i.e. General

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Electric or Honeywell); and

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(k)

Using Scellusaleads and Pure Clar, their employees, officers,

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directors, related companies, predecessor/successor companies, affiliates, or subsidiaries for the

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purpose of generating sales leads for Security One.

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2.

ORDERED and ADJUDGED that the parties will engage in a good-faith effort to

resolve any and all allegations of a violation by any Enjoined Person of the terms of this
PERMANENT INJUNCTION

Case No. C-11-05149-JW

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Permanent Injunction without Court intervention. In the event that Defendants or the Enjoined

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Persons are alleged to have violated the terms of this Permanent Injunction, the following

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procedure will apply:

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a. ADT shall notify Defendants of the alleged violation, in writing, by stating the

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name and address of the customer, stating the date (if known) and nature of the

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alleged violation, and providing such non-privileged information as ADT may

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possess describing the alleged violation, including, if available, any customer

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declarations or audio recordings, but not including any private customer data not

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related to the violation such as Social Security numbers, bank account numbers, or

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alarm passcodes (the “Notice of Alleged Violation”);

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b. Within fourteen days of receiving a Notice of Alleged Violation, Defendants shall

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investigate the violation and provide ADT with notice in writing of the steps taken

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and facts found in the investigation, a statement of whether the alleged violation

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was correct, and, if correct, the disciplinary action taken against the employee and

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remedial efforts made for the customer, along with all non-privileged records in

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Defendants’ control relating to the customer and the investigation (the

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“Response”); and

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c. Within seven days of receiving the Response, ADT and Defendants shall confer in

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an attempt to resolve the alleged violation without the necessity of Court

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intervention; and it is further

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3.

ORDERED and ADJUDGED that in the event ADT and Defendants are unable to

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resolve any alleged violations amongst themselves through the procedures stated in the preceding

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paragraph, ADT may file a motion or proceeding with this Court alleging such violation. By

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agreement of the parties, all parties waive their right to a jury, and no party may demand a jury to

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decide any of the claims or defenses presented at any such motion or proceeding. By agreement

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of the parties, the prevailing party in any such motion or proceeding shall be awarded its attorney

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fees and all costs incurred in it. The Court reserves the right to grant ADT such relief as the

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Court finds appropriate in the circumstances; and it is further
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4.

ORDERED and ADJUDGED that this Injunction binds the Enjoined Persons

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immediately and permanently. This Injunction may not be dissolved or modified except under

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extraordinary circumstances as provided by the Federal Rules of Civil Procedure, or upon a joint

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application by Defendants and ADT to this Court for relief. This Court retains exclusive
for ten years
jurisdiction to hear and decide any requests to construe, enforce, modify or dissolve the
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Injunction, or to hear and decide any disputes otherwise arising from the Enjoined Persons’

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compliance with it.

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SO ORDERED.

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October
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Dated: September __, 2013

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_______________________________
The Hon. Yvonne Gonzalez Rogers
United States District Judge

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PERMANENT INJUNCTION

Case No. C-11-05149-JW