PERFORMANCE DYNAMICS, INC. v. FLYNN et al

Filing 140

ENTRY REGARDING INJUNCTION 124 - The Court declines to enter an injunction that, from the outset, presents problems of interpretation and enforcement. It was certainly possible for the parties to draft an appropriate injunction, but they have fa iled to do so. The Court's determination that the terms of the mediation agreement are enforceable is undisturbed by this Entry, i.e., the agreement set forth in pages one through three of Docket Number 108 -1 remains in effect. Signed by Judge William T. Lawrence on 8/25/2017.(JDC)

UNITED STATES DISTRICT COURT
SOUTHERN DISTRICT OF INDIANA
INDIANAPOLIS DIVISION
PERFORMANCE DYNAMICS, INC,
Plaintiff,
vs.
TIMOTHY W. FLYNN, et al.,
Defendants.

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) Cause No. 1:13-cv-298-WTL-MJD
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ENTRY REGARDING INJUNCTION
In its entry on the Defendants’ motion to reconsider (Dkt. No. 124), the Court directed
the parties to submit a proposed injunction within ten days of the date of the Court’s entry. The
parties have submitted proposed injunctions. Before discussing the propriety of an injunction in
this matter, the Court presents a brief summary of this case’s procedural history to provide
context.
Plaintiff Performance Dynamics, Inc. (“Performance Dynamics”) alleges in its Amended
Complaint that it maintains proprietary rights in a physical therapy methodology known as
ASTYM®. The Defendants consist of both business entities providing continuing education to
physical therapists and those providing physical therapy to patients, as well as the individuals
who own or are in upper management of the defendant business entities. Performance Dynamics
alleges that it entered into service, confidentiality, and other agreements with the Defendants,
who then copied its ASTYM® method, adopted the method as its own, trained others in the
method under a different name, disclosed Performance Dynamics’ confidential information, and
did not pay Performance Dynamics according to their agreements. Performance Dynamics
asserts claims against the Defendants for breach of contract, misappropriation of confidential

information in violation of the Indiana Trade Secrets Act, violations of the Lanham Act, common
law trademark infringement, unfair competition, and tortious interference. In January 2015, the
Defendants moved to dismiss a portion of the claims and filed counterclaims against
Performance Dynamics, alleging breach of contract, fraudulent misrepresentation, and violation
of the Virginia Wiretap Act. In February 2015, Performance Dynamics moved for partial
summary judgment as to the Defendants’ fraudulent misrepresentation and violation of Virginia
Wiretap Act counterclaims.
With those motions pending, Judge Baker held a settlement conference on April 20,
2015. The settlement conference lasted approximately six hours. All parties were represented
by counsel for the duration of the conference. A settlement agreement was executed at the
conference (the “mediation agreement”). The mediation agreement was memorialized on seven
pages, including two pages containing handwritten mark-ups to a document that had been
provided by Performance Dynamics’ counsel to defense counsel on April 17, 2015; a sheet of
notebook paper with handwritten terms; and three pages containing handwritten mark-ups to a
proposed permanent injunction entry that had been provided by Performance Dynamics’ counsel
to defense counsel on April 16, 2015 (Dkt. No. 108-1).
Defense counsel agreed to compose a clean, typewritten version of the mediation
agreement. On June 4, 2015, defense counsel sent a typed document entitled “Settlement
Agreement and Mutual Release” to Performance Dynamics’ counsel. See Dkt. No. 113-1. The
typed version intentionally omitted the following term from the mediation agreement: “No other
instrumented soft tissue treatment shall be provided at any such facility” (the “Omitted Term”),
which the Defendants maintain “should have been either struck from the document that was
signed at the conclusion of the settlement conference” or that the mediation agreement should

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have been otherwise altered to give no effect to the Omitted Term. Dkt. No. 112 at 3-4. In
response to the Defendants’ attempt to omit the term, Performance Dynamics moved to enforce
the terms of the mediation agreement (Dkt. No. 104).
On July 18, 2016, the Court granted the Plaintiff’s motion to enforce mediation
agreement and requested that the parties submit to the Court a proposed injunction within
fourteen days (Dkt. No. 115). Instead of filing a proposed injunction, the Defendants asked the
Court to reconsider its decision to deny the parties’ request for a hearing and also to ask the
Court to reconsider in its entirety its entry on the Plaintiff’s motion to enforce mediation
agreement (Dkt. No. 120).
On May 3, 2017, the Court denied in its entirety the Defendants’ motion to reconsider
(Dkt. No. 124). In that entry, the Court again directed the parties to submit a proposed injunction
within ten days of the date of its entry, and informed the parties that, if they did not do so, the
Court would rely on and evaluate the injunction terms contained in the agreement resulting from
the settlement conference on April 20, 2015, i.e., pages four through seven of Docket Number
108-1 (the “April 20, 2015, Injunction”).
The parties did not submit a single proposed document. Instead, the Plaintiff submitted
what it purported to be “a ‘clean’ version” of the April 20, 2015, Injunction, Dkt. No. 127
(referring to Dkt. No. 127-1), that introduced new language to its terms, and the Defendants
similarly submitted a new proposed “Entry” that they stated “better reflects the current
procedural and substantive posture of this action” and “more accurately reflects the intent and
language of the draft injunction . . . that emerged from the April 20, 2015, settlement
conference,” Dkt. No. 128 at 1 (referring to Dkt. No. 128-1). The Court now considers the
propriety of entering an injunction in this case.

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The terms presented in the April 20, 2015, Injunction state that they are “before the Court
on the Joint Motion of the Parties for entry of an Order of Permanent Injunction.” Dkt. No. 1081 at 1. That, however, is not the case; as the Defendants note, the parties did not submit a joint
motion for entry of an order of permanent injunction. See Dkt. No. 128 at 5. Instead, the terms
presented in the April 20, 2015, Injunction are before the Court as part of a mediation agreement
between the parties. The Court notes that the broader mediation agreement contemplates the
entry of an injunction, (see Dkt. No. 108-1 at 2), but does not condition the obligations of the
mediation agreement on the entry of an injunction or relieve the parties from the obligations of
the mediation agreement if an injunction is not entered.
The Court, having reviewed the terms of the various proposed injunctions, now declines
to enter an injunction in this case. None of the proposed injunctions are entirely consistent with
the terms of the parties’ mediation agreement. For example, the proposed terms prevent the
Defendants from “making representations about, or advising anyone in ASTYM® therapy.” Dkt.
Nos. 108-1 at 6; 127-1 at 3; and 128-1 at 4. Such language would not allow the Defendants to
discuss ASTYM® therapy with patients, even if that were the treatment patients were receiving,
nor would it allow the Defendants to recommend to patients that they engage in ASTYM®
therapy in the first place. The mediation agreement, however, contemplates allowing the
Defendants to do both of these things. See Dkt. No. 108-1 at ¶3.
The Court declines to enter an injunction that, from the outset, presents problems of
interpretation and enforcement. It was certainly possible for the parties to draft an appropriate
injunction, but they have failed to do so. The Court’s determination that the terms of the

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mediation agreement are enforceable is undisturbed by this Entry, i.e., the agreement set forth in
pages one through three of Docket Number 108-1 remains in effect.1
SO ORDERED: 8/25/17

_______________________________
Hon. William T. Lawrence, Judge
United States District Court
Southern District of Indiana

Copies to all counsel of record via electronic notification

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Docket Number 113-4 contains the unredacted version of page one of Docket Number

108-1.
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