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)

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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 ^ 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 2 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 3 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: 4 To ADT: ADT LLC Attn: General Counsel & Chief Litigation Counsel 1501 Yamato Road Boca Raton, FL 33431 Email: with a copy to C. Sanders McNew, Esquire McNEW P.A. 2385 NW Executive Center Drive, Suite 100 Boca Raton, FL 33431 Email: To Security One: Security One International, Inc. 11601 Wilshire Boulevard, Suite 500 Los Angeles, California 90025 Email: with a copy to John O’Bryan, Esquire FREEBORN & PETERS LLP 311 South Wacker Drive, Suite 3000 Chicago, Illinois 60606 Email: 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 5 1 EXHIBIT A 2 UNITED STATES DISTRICT COURT 3 4 NORTHERN DISTRICT OF CALIFORNIA – OAKLAND DIVISION 5 6 ADT SECURITY SERVICES, INC., 7 8 9 10 Plaintiff, vs. 13 14 15 16 PERMANENT INJUNCTION SECURITY ONE INTERNATIONAL, INC., and CLAUDIO HAND, Defendants. 11 12 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”), 17 and CLAUDIO HAND (collectively, “Defendants”), and their respective owners, members, 18 managers, agents, servants, employees, independent contractors, telemarketers, officers, directors, 19 attorneys, partners, subsidiaries, successors and assigns, or any transferee of the businesses or 20 assets of either Defendant (collectively, “Enjoined Persons”), and those acting in active concert 21 22 23 24 25 26 27 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; 28 PERMANENT INJUNCTION Case No. C-11-05149-JW 1 2 (b) ADT and is ADT’s new security service provider; 3 4 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; 5 (d) Representing to ADT customers that SECURITY ONE is affiliated 6 with ADT and that ADT has authorized SECURITY ONE to provide an “upgrade” to the 7 customer’s ADT security system; 8 9 (e) to SECURITY ONE to receive a better rate; 10 11 (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; 12 13 Informing ADT customers that ADT is transferring select accounts is doing business, or has limited or eliminated any services; 14 (h) Making any material false statement of fact regarding ADT 15 including, but not limited to, function, performance, capabilities, specifications, features, 16 requirements, reliability, availability, origin, sponsorship, approval, or design of any ADT 17 equipment, alarm systems, sales, or service; 18 19 (i) Making calls by telephone to any ADT call center or customer support hotline and posing as an ADT customer or potential customer; 20 (j) Making any false representation to any ADT customer while 21 soliciting the customer’s business, including without limitation, as it relates to their relationship 22 and/or affiliation with the manufacturer of the customer’s alarm system equipment (i.e. General 23 Electric or Honeywell); and 24 (k) Using Scellusaleads and Pure Clar, their employees, officers, 25 directors, related companies, predecessor/successor companies, affiliates, or subsidiaries for the 26 purpose of generating sales leads for Security One. 27 28 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 1 Permanent Injunction without Court intervention. In the event that Defendants or the Enjoined 2 Persons are alleged to have violated the terms of this Permanent Injunction, the following 3 procedure will apply: 4 a. ADT shall notify Defendants of the alleged violation, in writing, by stating the 5 name and address of the customer, stating the date (if known) and nature of the 6 alleged violation, and providing such non-privileged information as ADT may 7 possess describing the alleged violation, including, if available, any customer 8 declarations or audio recordings, but not including any private customer data not 9 related to the violation such as Social Security numbers, bank account numbers, or 10 alarm passcodes (the “Notice of Alleged Violation”); 11 b. Within fourteen days of receiving a Notice of Alleged Violation, Defendants shall 12 investigate the violation and provide ADT with notice in writing of the steps taken 13 and facts found in the investigation, a statement of whether the alleged violation 14 was correct, and, if correct, the disciplinary action taken against the employee and 15 remedial efforts made for the customer, along with all non-privileged records in 16 Defendants’ control relating to the customer and the investigation (the 17 “Response”); and 18 c. Within seven days of receiving the Response, ADT and Defendants shall confer in 19 an attempt to resolve the alleged violation without the necessity of Court 20 intervention; and it is further 21 3. ORDERED and ADJUDGED that in the event ADT and Defendants are unable to 22 resolve any alleged violations amongst themselves through the procedures stated in the preceding 23 paragraph, ADT may file a motion or proceeding with this Court alleging such violation. By 24 agreement of the parties, all parties waive their right to a jury, and no party may demand a jury to 25 decide any of the claims or defenses presented at any such motion or proceeding. By agreement 26 of the parties, the prevailing party in any such motion or proceeding shall be awarded its attorney 27 fees and all costs incurred in it. The Court reserves the right to grant ADT such relief as the 28 Court finds appropriate in the circumstances; and it is further PERMANENT INJUNCTION Case No. C-11-05149-JW 1 4. ORDERED and ADJUDGED that this Injunction binds the Enjoined Persons 2 immediately and permanently. This Injunction may not be dissolved or modified except under 3 extraordinary circumstances as provided by the Federal Rules of Civil Procedure, or upon a joint 4 6 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 ^ Injunction, or to hear and decide any disputes otherwise arising from the Enjoined Persons’ 7 compliance with it. 5 8 SO ORDERED. 9 10 11 October 1 Dated: September __, 2013 12 _______________________________ The Hon. Yvonne Gonzalez Rogers United States District Judge 13 14 15 16 17 18 19 20 21 22 23 24 25 26 27 28 PERMANENT INJUNCTION Case No. C-11-05149-JW

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