Vogel v. Albert et al
Filing
14
MEMORANDUM OPINION. Signed by Judge Deborah K. Chasanow on 9/15/2016. (sat, Chambers)
IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF MARYLAND
:
RICHARD VOGEL
:
v.
:
Civil Action No. DKC 15-3300
:
DAVID ALBERT, et al.
:
MEMORANDUM OPINION
Presently
pending
and
ready
for
resolution
are
(1)
the
motion to dismiss or alternatively for summary judgment filed by
Defendants
David
Albert
and
David
Albert
&
Associates
(“Defendants”) (ECF No. 5), and (2) a renewed joint motion to
seal
by
Plaintiff
(ECF No. 11).
Richard
Vogel
(“Plaintiff”)
the
following
alternatively
Defendants
The motions have been briefed, and the court now
rules, no hearing being deemed necessary.
For
and
for
reasons,
summary
the
judgment
Local Rule 105.6.
motion
will
to
be
dismiss
DENIED,
and
or
the
motion to seal will be GRANTED.
I.
Background
The
complaint
alleges
that
Plaintiff
was
the
founder,
President, CEO, Secretary, majority shareholder, and sole voting
shareholder of Innovative Therapies, Inc. (“ITI”), a Delaware
corporation.
(ECF No. 1 ¶¶ 1, 5, 9).
ITI
Defendants
retained
to
provide
In 2007, Plaintiff and
legal
advice
related
to
changing
ITI’s
corporate
structure.
(Id.
Plaintiff again sought to restructure.
¶
10).
In
2011,
Acting on Defendants’
advice, Plaintiff drafted and ITI’s Board approved the issuance
of new stock in several different forms without providing notice
to ITI’s non-voting shareholders.
(Id. ¶¶ 15-16).
Even though
those shareholders lacked voting rights under ITI’s certificate
of incorporation, Delaware law required that they be given the
opportunity to vote on an action, like this one, that would
increase the aggregate number of authorized shares.
(Id. ¶ 18).
The issuance of stock and the resolution passed by the Board
were thus void under Delaware law.
resulted
equity
in
than
the
distribution
planned;
of
excessive
(Id. ¶ 19).
a
greater
distribution
This mistake
portion
of
of
ITI’s
dividends
to
Plaintiff as a majority shareholder, which he later repaid; a
significant loss in profit for shareholders when ITI was sold to
Cardinal
Health
correct
the
(“Cardinal”)
stock
Plaintiff and ITI.
split;
in
2014;
and
costs
additional
for
services
to
legal
costs
for
(Id. ¶¶ 20-26).
As part of the Agreement and Plan of Merger for the sale to
Cardinal, Plaintiff signed a release dated August 29, 2014 (the
“Release”).
Cardinal,
(ECF
ITI,
and
No.
5-3).
The
Plaintiff,
“as
Release
an
named
individual
representative for all of the Stockholders.”
and
parties
as
(Id. at 1).
stockholders are the “Releasors” under the Release.
2
as
the
The
The other
three
parties
“Releasees.”
and
their
(Id.).
specified
Plaintiff
both
associates
releases
are
the
certain
other
parties as a stockholder and is released by the stockholders in
his other capacities.
The
Release
(Id. ¶¶ 2-3).
contains
several
definitions.
First,
the
“Company Releasees” are ITI and “its Subsidiaries and each of
their respective individual, joint or mutual, past, present, and
future
current
representatives,
and
(Id. ¶ 2).
respective
predecessors,
directors,
employees
successors,
and
(both
assigns.”
Second, the “Vogel Releasees” are Plaintiff and “his
past,
affiliates,
assigns.”
former),
officers,
present,
subsidiaries,
(Id. ¶ 3).
and
insurers,
future
attorneys,
representatives,
successors
and
Third, the Releasees are released by the
Releasors from the “Released Claims,” which include, as relevant
here:
[A]ny and all claims, demands, proceedings,
causes
of
action,
orders,
obligations,
damages, interest, contracts, agreements,
debts, liabilities, attorneys’ fees, and
expenses, whatsoever, whether in law or
equity, whether known or unknown, suspected
or unsuspected, which such Releasor now has,
has ever had or may hereafter have against
the
respective
[]
Releasees
arising
contemporaneously with or prior to the
Closing or on account of or arising out of
any
matter,
cause,
or
event
occurring
contemporaneously with or prior to the
Closing,
including,
but
not
limited
to, . . . (c)
breach
of
fiduciary
duty, . . . (f)
any
amendment,
whether
effective or ineffective, to the Company’s
3
Certificate of Incorporation or Bylaws, (g)
the capitalization of the Company, (h) the
Performance
Unit
Plan
(including
any
amendments thereto) and the Performance
Units
issued
thereunder . . . . Further,
Releasor waives the right to recover from
any
complaints,
charges,
lawsuits,
administrative
proceedings . . .,
False
Claims
Act
proceedings
or
qui
tam
proceedings, filed by the Releasor or by any
federal or state agency on the Releasor’s
behalf, concerning the Releasees (as defined
below) or any Released Claims.
(Id. ¶ 2).
except
in
The Release also states that it “may not be changed
a
writing
signed
by
the
interest such a change will operate.”
After
relating
the
to
Release
this
was
dispute,
raised
Plaintiff
person(s)
against
whose
(Id. ¶ 10).
in
and
pre-suit
discussions
Cardinal
signed
an
Amendment to the Agreement and Plan of Merger (“Amendment”) in
June 2015.
Cardinal
(ECF No. 5-4).
and
Plaintiff
In Paragraph 3.c of the Amendment,
included
a
“Clarification
Release” that states:
[N]othing in the August 2014 Release or in
this Amendment was or is intended to release
any
claims
that
Vogel
or
any
other
Stockholder Releasor has or had against any
attorney or accountant who represented ITI,
Vogel, and/or any other Stockholder Releasor
prior to Closing in connection with the
authorization or issuance of any shares, any
amendments or restatements of the articles
of
incorporation
of
ITI
stock
splits,
creation or elimination of any classes or
categories
of
shares
or
shareholders,
transfers of shares, or any matters relating
to the capitalization of ITI (the “Advisor
Claims”), specifically including, but not
4
of
Prior
limited to, any claims whatsoever against
[Defendants]; and to the extent necessary to
give effect to subsection (ii) immediately
preceding this clause, the August 2014
Release is amended to explicitly exclude any
release of [Defendants], and that amendment
shall be nunc pro tunc to the date of the
August 2014 Release.
(Id. ¶ 3.c).
Under Paragraph 3.d. of the Amendment, “[a]ny
claims that ITI has or had against any of the [Defendants] are
irrevocably assigned to Vogel.”
Plaintiff
negligent
assignee
Defendants
filed
legal
of
this
suit
malpractice
ITI’s
filed
legal
the
(Id. ¶ 3.d).
on
alleging
a
his
behalf
claims.
instant
own
(ECF
motion
to
single
No.
1
count
and
as
of
the
¶¶
27-32).
or
in
dismiss,
the
alternative, for summary judgment, on November 23, 2015, raising
the defense that Plaintiff released all claims against them as
Vogel Releasees under the Release.
responded and Defendants replied.
II.
(ECF No. 5).
Plaintiff
(ECF Nos. 12; 13).
Standard of Review
Defendants’ motion is styled as a motion to dismiss, or in
the alternative, for summary judgment.
converting
a
motion
to
dismiss
into
A court may, without
a
motion
for
summary
judgment, “consider documents attached to the complaint as well
as those attached to the motion to dismiss, so long as they are
integral to the complaint and authentic.”
Mem’l
Hosp.,
572
F.3d
176,
180
5
(4th
Philips v. Pitt Cnty.
Cir.
2009)
(citation
omitted).
“An affirmative defense, such as release, is not
ordinarily
considered
plaintiff
is
not
on
a
required
motion
to
to
negate
dismiss
it
in
because
the
the
complaint.”
Alexander v. UIP Prop. Mgmt., No. DKC-14-2469, 2015 WL 1472004,
at *3 (D.Md. Mar. 30, 2015); see Goodman v. Praxair, Inc., 494
F.3d 458, 464 (4th Cir. 2007).
An affirmative defense can be
considered on a motion to dismiss only “if all facts necessary
to the affirmative defense ‘clearly appear on the face of the
complaint.’”
Goodman,
494
F.3d
at
464
(quoting
Richmond,
Fredericksburg & Potomac R.R. v. Forst, 4 F.3d 244, 250 (4th Cir.
1993)).
“[A] movant cannot merely show that the elements of the
defense
appear
on
the
face
of
the
complaint
or
in
properly
considered documents, but must also ‘show that the plaintiff’s
potential rejoinder to the affirmative defense was foreclosed by
the allegations in the complaint.’”
Alexander, 2015 WL 1472004,
at *2 (quoting Goodman, 494 F.3d at 466).
parties
have
stipulated
to
the
Here, although the
authenticity
of
Defendants’
exhibits (ECF No. 5-1, at 2 n.2), the exhibits are integral only
to Defendants’ defense, not the complaint.
Defendants’ motion
will be construed as a motion for summary judgment.
A motion for summary judgment will be granted only if there
exists no genuine dispute as to any material fact and the moving
party
is
entitled
to
judgment
as
a
matter
of
law.
See
Fed.R.Civ.P. 56(a); Celotex Corp. v. Catrett, 477 U.S. 317, 322
6
(1986);
Anderson
v.
Liberty
Lobby,
Inc.,
477
U.S.
242,
250
(1986); Emmett v. Johnson, 532 F.3d 291, 297 (4th Cir. 2008).
A
dispute about a material fact is genuine “if the evidence is
such
that
a
nonmoving
reasonable
party.”
jury
could
a
Lobby,
Liberty
return
verdict
477
U.S.
at
for
the
249.
In
undertaking this inquiry, a court must view the facts and the
reasonable
inferences
drawn
therefrom
“in
the
light
most
favorable to the party opposing the motion,” Matsushita Elec.
Indus.
Co.
(quoting
v.
Zenith
United
Radio
Corp.,
v.
Diebold,
States
475
U.S.
Inc.,
574,
369
587
U.S.
(1986)
654,
655
(1962)); see also EEOC v. Navy Fed. Credit Union, 424 F.3d 397,
405 (4th Cir. 2005), but a “party cannot create a genuine dispute
of
material
fact
through
inferences,”
Shin
v.
mere
speculation
Shalala,
166
or
F.Supp.2d
compilation
373,
375
of
(D.Md.
2001).
“Defendants bear the burden of proving that the elements of
release are satisfied.”
Auslander v. Helfand, 988 F.Supp. 576,
580 (D.Md. 1997) (citing Allen v. Zurich Ins. Co., 667 F.2d
1162,
1164
(4th
Cir.
1982)).
“A
defendant
asserting
an
affirmative defense in a summary judgment motion must initially
prove
that
no
disputed
material
fact
exists
regarding
the
defense,” at which point “the burden shifts to the plaintiff to
demonstrate
specific
disputed
material
facts
precluding
application of the affirmative defense; if the plaintiff fails
7
to do so, the defendant’s motion must be granted.”
Id. (citing
Hutchinson v. Pfeil, 105 F.3d 562, 564 (10th Cir. 1997)).
III. Motion for Summary Judgment
A.
Applicable Law
In diversity actions, the choice of law rules of the state
in
which
the
district
substantive law.
court
sits
determine
the
applicable
See Klaxon Co. v. Stentor Elec. Mfg. Co., 313
U.S. 487, 496 (1941); Colgan Air, Inc. v. Raytheon Aircraft Co.,
507 F.3d 270, 275 (4th Cir. 2007).
For contract claims, Maryland
applies the doctrine of lex loci contractus, applying the law of
the state where the contract was formed, unless the contract
contains a choice of law provision.
ARTRA
Group,
Inc.,
338
Md.
560,
Lipchin, 288 Md. 30 (1980).
Am. Motorists Ins. Co. v.
572-73
(1995);
Kronovet
v.
Because the sale agreement, the
Release, and the Amendment all include choice of law provisions
submitting to the “law[s] of the State of Delaware,” (ECF Nos.
5-2, at 78; 5-3, at 3; 5-4, at 5), Delaware law governs the
contract dispute here.
Under Delaware law, a release is “a form of contract with
the consideration typically being the surrender of a claim or
cause
of
action
in
exchange
for
surrender or an offsetting claim.”
the
payment
of
funds
or
E.I. DuPont de Nemours & Co.
v. Fla. Evergreen Foliage, 744 A.2d 457, 462 (Del. 1999).
In
interpreting releases, like all contracts, Delaware courts “give
8
priority to the parties’ intentions as reflected in the four
corners of the agreement,” construing the agreement as a whole.
Riverbend Cmty., LLC v. Green Stone Eng’g, LLC, 55 A.3d 330, 334
(Del.
2012).
Releases
can
be
specific,
renouncing
certain
claims known to the parties, or general, “intended to cover
everything—what the parties presently have in mind, as well as
what
they
arise.”
do
not
have
in
mind,
but
what
may,
nevertheless,
Hob Tea Room v. Miller, 89 A.2d 851, 856 (Del. 1952).
B.
Analysis
The dispute over the Release in this case is complicated by
the multiple roles that both Defendants and Plaintiff took on in
this case.
Plaintiff alleges that Defendants provided legal
representation and breached the duty of care owed both to him
and to ITI (ECF Nos. 1 ¶¶ 1, 10-11; 12, at 14), and “brings this
action on his own behalf and as the assignee of ITI” (ECF No. 1
¶ 6).
It is unclear from the complaint whether Plaintiff’s own
claim is brought on the basis of Defendants’ representation of
ITI, or whether it is based on legal advice provided to him
personally.
(ECF No. 1 ¶¶ 27-32).
Plaintiff now argues that,
“[w]hile Mr. Albert and his firm did at times act as Mr. Vogel’s
attorneys,
they
attorneys.
are
That
sued
was
here
the
in
capacity
their
in
capacity
which
they
as
ITI’s
provided
negligently erroneous legal advice regarding ITI’s stock split.”
(ECF
No.
12,
at
14).
Under
9
the
Release,
Plaintiff
is
a
Releasor,
both
as
an
individual
stockholder
and
as
the
representative for all of the stockholders (ECF No. 5-3 ¶ 1),
but he is also a Releasee, both as an officer and director of
ITI (id. ¶ 2), and as an individual (id. ¶ 3).
1.
ITI’s Claims as Assigned by the Amendment
Plaintiff brings a negligence claim as the assignee of ITI.
(ECF No. 1 ¶ 6).
Release.
ITI did not release any claims under the
ITI was solely a “Releasee” in the Release, and none
of the Release provisions could be construed to divest it of its
rights to sue its lawyers.
(ECF No. 5-3, at 1).
The Release,
therefore, did not affect ITI’s claim against Defendants for
malpractice related to work that they did for ITI, and that
claim was received by Cardinal when it purchased ITI.
In the
Amendment, Cardinal assigned any claims that ITI has or had
against
Defendants
to
Plaintiff
(ECF Nos. 5-4 ¶ 3.d; 1 ¶ 6).
in
his
individual
capacity.1
Defendants do not challenge the
validity of this assignment,2 and appear to concede in the reply
1
Plaintiff was once again a signatory to this document in
his
personal
capacity
and
as
a
representative
of
the
stockholders, but the Amendment distinguished between the two
roles by referring to Plaintiff as “Vogel” when he was acting as
an individual and as “Representative” when he was acting as a
representative of the stockholders. (ECF No. 5-4, at 1).
2
Although
Defendants
contest
the
validity
of
the
Amendment’s Clarification of Prior Release provision, the
assignment provision at issue here is not subject to the same
challenge because it does not change Defendants’ position under
the Release.
(See ECF No. 5-3 ¶ 10).
Cardinal’s assignment
10
that Plaintiff can bring the claims Cardinal assigned to him on
behalf
of
dismissal
ITI.
of
(Compare
entire
ECF
complaint)
No.
5-1,
at
10
with
ECF
No.
(moving
13,
at
for
1-2,
6
(asking the court to “dismiss all claims brought by Mr. Vogel in
his individual capacity and in his capacity as a representative
of the ITI and/or Cardinal shareholders,” but not those brought
by Plaintiff as the assignee of ITI’s claims)).
Defendants’
motion for summary judgment on claims Plaintiff brings on behalf
of ITI, as assigned to Plaintiff by Cardinal in the Amendment,
will be denied.
2.
Defendants Are Not Released under the Company Release
As explained above, the Releasors under the Release are
ITI’s stockholders, including Plaintiff.
The Company Release
provides that the Releasors released and discharged ITI, its
representatives,
officers,
directors,
others, from the Released Claims.
and
employees,
among
(ECF No. 5-3 ¶ 2).
ITI’s
attorneys are not included as Company Releasees.
acknowledge
this,
noting
that
the
parties
to
Defendants
the
Release
“specifically excluded ITI’s attorneys from the Release.”
No. 13, at 4).
allegation
that
(ECF
Plaintiff’s claim, however, is based on an
Defendants
were
ITI’s
attorneys
and
were
simply transfers its rights to Plaintiff, and Defendants’
interests are the same regardless of who holds this claim.
11
accordingly
not
released.3
Under
the
plain
language
of
the
Release, Plaintiff did not, as a stockholder or in any other
capacity,
release
any
claims
against
Defendants
in
their
capacity as ITI’s attorneys.
3.
Defendants Are Released under the Vogel Release Solely
in their Capacity as Plaintiff’s Attorneys
Defendants rely on the Vogel Release in their motion.
Vogel
Releasees
specifically
include
Plaintiff
and
The
his
“attorneys,” unlike the Company Releasees, which do not include
ITI’s attorneys.
(ECF No. 5-3 ¶¶ 2-3).
Plaintiff argues that
Defendants are sued here not as Plaintiff’s attorneys, but as
ITI’s attorneys; that Defendants should be considered unnamed
third parties under the release and therefore cannot meet their
burden to establish that they were intended to be released; and
that
the
Release
was
“clarified”
by
the
Amendment,
which
establishes that the Release was not meant to release claims
against Defendants.
(See ECF No. 12, at 1-2).
As discussed above, the Released Claims were not released
by Plaintiff and the other stockholders against Defendants as
ITI’s attorneys.
Any work performed by Defendants for Plaintiff
as an individual would fall under the Released Claims, however,
and Plaintiff and the other stockholders appear to have released
3
Defendants do not admit that they were ITI’s attorneys,
but at this stage Plaintiff’s allegation in the complaint is
taken as true.
12
those claims against Defendants under the plain language of the
Release.
Plaintiff argues that Defendants are unnamed third parties
seeking the benefit of a release, and as such must show that the
release was “crystal clear and unambiguous” to establish that
they
were
intended
to
be
released.
(ECF
No.
12,
at
2).
Delaware law does set a high bar “where a third party, not
specifically named . . . asserts rights under general language.”
Chakov v. Outboard Marine Corp., 429 A.2d 984, 985 (Del. 1981).
“[I]n order for a release to protect a third party as a matter
of law, the language of the release must be crystal clear and
unambiguous in its inclusion of that person among the parties
released.”
Rochen v. Huang, No. C.A. 87C-JN-96, 1989 WL 5374,
at *1 (Del.Super.Ct. Jan. 4, 1989) (citing Chakov, 429 A.2d at
985).
The
Chakov
and
Rochen
courts,
however,
were
distinguishing between parties specifically enumerated in the
release—an individual and “his heirs, executors, administrators,
agents and assigns”—and those covered by the phrase “all other
persons, firms or corporations liable or who might be claimed to
be liable.”
Chakov, 429 A.2d at 985; Rochen, 1989 WL 5374, at
*1 (interpreting identical language).
Although Defendants are
not identified by name in the Release, Plaintiff’s “attorneys”
are
specifically
“officers,
referenced
directors,
in
employees”
13
the
and
Release,
others
just
are
as
ITI’s
referenced.
(ECF No. 5-3 ¶¶ 2-3).
require
being
the
specific
released
As Defendants rightly point out, to
names
would
of
wreak
all
“third
havoc
on
party”
the
individuals
Release,
identifies only one individual—Plaintiff—by name.
which
Plaintiff’s
argument would make the Release virtually meaningless; it would,
for example, mean that the shareholders did not release any
claims against Plaintiff in his capacities as an officer and
director, because under the Company Release Plaintiff would be
an “unnamed third party.”
Assuming as alleged by both Plaintiff and Defendants that
Defendants did at some point act as Plaintiff’s attorneys (ECF
Nos. 1 ¶ 1; 5-1, at 1; 12, at 14; 13, at 2), Defendants are not
unnamed
third
unambiguously
parties
Vogel
under
the
Releasees.4
Release
This
but
case
rather
is
are
therefore
distinguishable from Chakov and the other cases Plaintiff cites,
in each of which the non-parties to the release attempted to be
released through an “all other” clause.
985
(relying
on
the
phrase
“all
See Chakov, 429 A.2d at
other
persons,
firms
or
corporations liable or, who might be claimed to be liable”);
Snead v. Stout, No. C.A. 04C-10-021-THG, 2005 WL 1653944, at *1
4
Plaintiff attempts to inject ambiguity in the Release by
asserting that the phrase “past, present, and future,” when read
with the modifiers in the Company and Parent Releases, renders
the Vogel Release ambiguous. (ECF No. 12, at 14-15). Plaintiff
has not offered any argument or alternate interpretation of this
language, however, which would exclude Defendants as Vogel
Releasees even if the phrase does not govern “attorneys.”
14
(Del.Super.Ct. June 16, 2005) (same); Rochen, 1989 WL 5374, at
*1 (same); see also Sellon v. Gen. Motors Corp., 521 F. Supp.
978,
980
(D.
Del.
1981)
(relying
on
the
phrase
“all
other
persons, firms, corporations, associations or partnerships”).
Plaintiff also argues that the Release is ambiguous as to
whether Plaintiff’s claim is within the scope of the Released
Claims.
Plaintiff argues that his claim is based on Defendants’
negligence in providing advice on the process for amending ITI’s
Certificate of Incorporation, and did not therefore “arise from”
the ineffective amendment.
(ECF No. 12, at 15).
Plaintiff’s claim is unambiguously covered by the Release.
Delaware courts “have ‘long upheld awards of summary judgment in
contract
disputes
unambiguous,’”
where
without
the
language
consideration
at
issue
is
of
extrinsic
clear
and
evidence.
Riverbend Cmty., 55 A.3d at 334 (quoting GMG Capital Invs., LLC
v. Athenian Venture Partners I, L.P., 36 A.3d 776, 783 (Del.
2012)).
The
Release
specific releases.
specifically
contains
both
a
(See ECF No. 5-3 ¶ 2).
include
those
“on
account
general
release
and
The Released Claims
of
or
arising
out
of . . . (f) any amendment, whether effective or ineffective, to
the Company’s Certificate of Incorporation or Bylaws, (g) the
capitalization of the Company, [and] (h) the Performance Unit
Plan
(including
any
amendments
Units issued thereunder.”
(Id.).
15
thereto)
and
the
Performance
Plaintiff alleges negligence
in Defendants’ “handling [of] the split and conversion of Mr.
Vogel’s shares of ITI stock,” which allegedly resulted in an
ineffective amendment to the Certificate of Incorporation and
incorrect distributions under the Performance Unit Plan.
No. 1 ¶ 29).
(ECF
Plaintiff’s alleged damages arise out of errors in
ITI’s capitalization (id. ¶¶ 23-25), the ineffective amendment
(id. ¶¶ 22, 26), and the distribution of Performance Units (id.
¶¶
20-21).
Plaintiff’s
“claims,
demands,
.
.
.
causes
of
action, . . . [and] damages” (ECF No. 5-3 ¶ 2), all plainly are
asserted on account of or arise out of the alleged ineffective
amendment,
ITI’s
capitalization,
Performance Units.
and
the
distribution
of
There is no ambiguity as to whether the
Release covers Defendants’ alleged conduct.
For the foregoing reasons, to the extent that Plaintiff
raises
any
claim
of
negligence
for
legal
representation
of
himself alone, as a director, officer, or individual, such claim
was released by Plaintiff and the other shareholders.
The
question
effective
in
“changed”
only
then
reinstating
through
becomes
those
“a
whether
claims.
writing
the
The
signed
Amendment
Release
by
against whose interest such change will operate.”
¶ 10).
the
can
was
be
person(s)
(ECF No. 5-3
The Amendment was signed by Cardinal and Plaintiff, but
not by Defendants.
It “clarifies” the Release by stating that
the Release was not intended to release “any claims that Vogel
16
or
any
other
Stockholder
Releasor
has
or
had
against
any
attorney or accountant who represented ITI, Vogel, and/or any
other Stockholder Releasor prior to Closing, . . . specifically
including, but not limited to, any claims whatsoever against
David Albert, David Albert & Associates, LLC, or any of their
respective affiliates, entities, or employees.”
3.c).
(ECF No. 5-4 ¶
The Amendment directly contradicts the Release, and this
provision cannot be a valid change to the Release because it was
not signed by Defendants and the other affected persons.
Defendants
have
proved
the
elements
of
release
are
satisfied, and Plaintiff has not demonstrated disputed material
facts that preclude the application of the defense.
has
released
any
Released
Claim
he
may
have
had
Plaintiff
against
Defendants for work that they performed solely as his attorneys.
Defendants’
release
inclusion
Defendants
in
as
Vogel
all
Releasees
capacities.
does
not,
Defendants
additional language in the Release that states:
Releasor waives the right to recover from
any
complaints,
charges,
[or]
lawsuits . . . filed by the Releasor or by
any
federal
or
state
agency
on
the
Releasor’s
behalf, concerning
the
Releasees (as defined below) or any Released
Claims.
. . . .
. . . Each Releasor hereby irrevocably
covenants to refrain from, directly or
indirectly, asserting any claim or demand,
commencing, instituting, or causing to be
commenced,
any
proceeding
of
any
kind
17
however,
point
to
against any Releasee, based upon any matter
purported to be released hereby.
(ECF No. 5-3 ¶¶ 2, 6).
Defendants argue that, if they are Vogel
Releasees,
these
then
under
provisions,
“Mr.
Vogel
may
not
recover against Defendants in their capacity as ITI’s alleged
attorneys.”
destroy
(ECF No. 5-1, at 6).
the
careful
drafting
of
Such an interpretation would
the
Release’s
provisions.
“Releasee” is a defined term in the Release, referring to the
Parent Releasees, Vogel Releasees, and Company Releasees.
No. 5-3 ¶ 4).
(ECF
Defendants acknowledge that they are not Company
Releasees; that they are Vogel Releasees does not allow them to
circumvent this exclusion.
Defendants are Releasees only so far
as they were acting as Plaintiff’s attorneys, and not to the
extent that they were retained in other capacities.
The terms of Defendants’ representation of Plaintiff and
ITI and the capacity in which they provided the legal advice
underlying
Plaintiff’s
Plaintiff’s
allegation
claim
that
remain
his
claim
in
is
dispute.
based
Taking
solely
on
Defendants’ representation of ITI as true, however, Defendants’
motion must be denied.
Defendants have not proved that such
claims were released either by ITI or by its shareholders.
18
IV.
Motion to Seal
Defendants
previously
memorandum, and exhibits.
moved
to
seal
(ECF No. 6).
their
motion,
The motion to seal was
denied without prejudice to renewal because it did not provide
specific
factual
representations
to
justify
the
sealing
or
explain why alternatives to sealing would not provide sufficient
protection,
as
Amendment.
required
(ECF
No.
by
Local
8).
The
Rule
105.11
parties
and
the
subsequently
First
filed
a
renewed joint motion to seal Defendants’ Exhibits A, B, and C
(ECF Nos. 5-2; 5-3; 5-4).
(ECF No. 11).
A motion to seal must comply with Local Rule 105.11, which
requires: “(a) proposed reasons supported by specific factual
representations to justify the sealing and (b) an explanation
why
alternatives
protection.”
to
sealing
would
not
provide
sufficient
This rule endeavors to protect the common law
right to inspect and copy judicial records and documents, Nixon
v.
Warner
recognizing
Commc’ns,
that
Inc.,
435
competing
U.S.
interests
589,
597
sometimes
(1978),
outweigh
while
the
public’s right of access, In re Knight Publ'g Co., 743 F.2d 231,
235 (4th Cir. 1984).
The court should consider “less drastic
alternatives to sealing,” such as filing redacted versions of
the documents.
Va. Dep’t of State Police v. Wash. Post, 386
F.3d 567, 576 (4th Cir. 2004).
If the court decides that sealing
is appropriate, it should also provide reasons, supported by
19
specific factual findings, for its decision to seal and for
rejecting alternatives.
Id.
In addition, the First Amendment provides a “more rigorous”
right of access for certain “judicial records and documents.”
Id. at 575-76.
“attaches
to
This qualified First Amendment right of access
materials
judgment motion.”
filed
in
connection
with
a
summary
Doe v. Pub. Citizen, 749 F.3d 246, 258, 267
(4th Cir. 2014) (citing Rushford v. New Yorker Magazine, Inc.,
846 F.2d 249, 252-53 (4th Cir. 1988)); Va. Dep’t of State Police,
386 F.3d at 578.
This right of access “may be restricted only
if closure is ‘necessitated by a compelling government interest’
and the denial of access is ‘narrowly tailored to serve that
interest.’”
Doe, 749 F.3d at 266 (quoting In re Wash. Post Co.,
807 F.2d 383, 390 (4th Cir. 1986)); see also In re U.S. for an
Order Pursuant to 18 U.S.C. Section 2703(D), 707 F.3d 283, 290
(4th Cir. 2013) (explaining the “significant” distinction between
the two rights of access).
The exhibits are part of Cardinal and ITI’s Agreement and
Plan of Merger.
Although the existence of the Agreement is now
public, the Agreement contains a confidentiality provision.
The
parties
and
assert
that
the
exhibits
contain
the
terms
conditions of a confidential agreement and potentially sensitive
information
regarding
the
company’s
employees.
They further allege that alternatives to sealing
20
structure,
finances,
and
would
not
provide
business
sufficient
information
protection
contained
to
within,
the
which
tangentially related” to the instant motion.
2).
confidential
is
“only
(ECF No. 11, at
While the parties request that the exhibits be sealed in
their
entirety,
they
propose
that
Defendants’
motion
and
memorandum of law in support, as well as Plaintiff’s opposition
and
the
reply,
extensively
providing
from
a
be
filed
the
public
publicly.
relevant
record
of
The
portions
the
briefing
of
basis
the
for
quotes
exhibits,
the
parties’
arguments.
The parties have sufficiently offered reasons supported by
specific factual representations to justify sealing the exhibits
under the Local Rule.
Because the parties’ public briefing and
this memorandum opinion quote and therefore make available the
portions of the exhibits relevant to this motion, the public’s
right
of
access
restricted.
to
judicial
records
and
documents
is
not
Accordingly, the parties’ motion will be granted
and the exhibits to Defendants’ motion (ECF Nos. 5-2; 5-3; 5-4),
will remain under seal.
V.
Conclusion
For
the
alternatively
foregoing
for
reasons,
summary
judgment
the
motion
filed
by
to
dismiss
Defendants
or
David
Albert and David Albert & Associates will be denied, and the
21
joint motion to seal will be granted.
A separate order will
follow.
/s/
DEBORAH K. CHASANOW
United States District Judge
22
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