Campbell v. Bender

Filing 85

ORDER granting 74 Motion to Seal; granting in part and denying in part 79 Sealed Motion. Signed by Magistrate Judge David Keesler on 3/26/12. (com)

IN THE UNITED STATES DISTRICT COURT
FOR THE WESTERN DISTRICT OF NORTH CAROLINA
CHARLOTTE DIVISION
CIVIL ACTION NO. 3:09-CV-465-MOC-DCK
STANLEY MARVIN CAMPBELL, Trustee in
Bankruptcy for ESA ENVIRONMENTAL
SPECIALISTS, INC.,

)
)
)
)
Plaintiff,
)
)
v.
)
)
PROSPECT CAPITAL CORPORATION,
)
individually and derivatively on behalf of
)
ESA ENVIRONMENTAL SPECIALISTS,
)
INC.,
)
)
Consolidated Plaintiff,
)
)
v.
)
)
HOULIHAN SMITH & COMPANY, INC.,
)
ADKISSON, SHERBERT & ASSOCIATES,
)
SANDRA DEE COLE, MICHAEL ANTHONY )
HABOWSKI, DENNIS M. MOLESEVICH,
)
and SUNTRUST BANKS, INC.,
)
)
Defendants.
)
__________________________________________)

ORDER

THIS MATTER IS BEFORE THE COURT on Defendant Adkisson Sherbert Associates,
P.A.’s “Motion To Permit Filing Of Materials Under Seal” (Document No.74) and “Plaintiff
Prospect Capital Corporation’s Motion For A Protective Order...” (Document No. 79). These
motions have been referred to the undersigned Magistrate Judge pursuant to 28 U.S.C. §636(b), and
are now ripe for disposition. Having carefully considered the arguments, the record, and applicable
authority, the undersigned will grant Defendant’s motion to seal, and grant in part and deny in part
Plaintiff’s motion for protective order.
Defendant Adkisson Sherbert Associates, P.A. (“ASA” or “Defendant”) seeks leave from

the Court to file under seal: (1) a motion to enforce settlement agreement; (2) the affidavit of
Frederick K. Sharpless, attorney for ASA, attesting to settlement negotiations and authenticating
relevant documents that will be attached as exhibits; (3) written communications between counsel
for Plaintiff Prospect Capital Corporation (“Prospect” or “Plaintiff”); (4) a brief in support of its
motion to enforce settlement agreement; and (5) other documents related to the alleged settlement
agreement. (Document No. 74, pp.2-3).
Defendant contends that these documents will assist the Court in determining whether ASA
and Prospect reached a settlement agreement on November 22, 2011. Id. Defendant reports that
ASA and Prospect agree that any documents filed should be sealed from both the public and the
other parties in this litigation, but do not agree on which documents ASA should be permitted to file.
Id. ASA and Prospect also disagree as to whether economic terms should be redacted if any of these
documents are filed. (Document No. 74, p.4).
In response, Plaintiff agrees that whatever ASA files related to “the confidential unexecuted
and undelivered draft proposed settlement agreement that ASA contends is enforceable against
Prospect (the ‘Unexecuted and Undelivered Draft Agreement’ or ‘UUDA’) must be filed under
seal.” (Document No. 81, p.2). However, Plaintiff opposes Defendant being allowed to submit
confidential settlement communications and economic terms it alleges the parties agreed upon. Id.
Defendant denies that it seeks enforcement of the document Plaintiff identifies as the
“Unexecuted and Undelivered Draft Agreement” (“UUDA”); rather, it seeks to enforce what it
alleges was “the complete settlement agreement reached on November 22, 2011.” (Document No.
82, p.3).
On February 22, 2012, Plaintiff filed its “...Motion For Protective Order...” (Document No.
79), which essentially argues the same issues in the parties’ papers regarding Defendant’s motion
2

to seal. Again, the parties agree that any documents filed in connection with ASA’s proposed
motion to enforce an alleged settlement agreement must be filed under seal, and disagree on the
scope of documents that should be allowed and on whether economic terms must be redacted.
(Document No. 79). In short, Plaintiff argues that the “UUDA” or “Confidential Settlement
Agreement” (Document No. 79-2), with its economic terms redacted, is the only document
Defendant should be allowed to file in support of its proposed motion to enforce the parties’ alleged
settlement agreement, even though Defendant contends that it seeks to enforce a complete agreement
reached on November 22, 2011, not the UUDA.
A case cited by both parties provides in pertinent part that
[D]istrict courts have inherent authority, deriving from their
equity power, to enforce settlement agreements. . . .
[i]f an agreement for complete settlement of the underlying
litigation, or part of it, has been reached and its terms and conditions
can be determined, the court may enforce the agreement summarily...
“[H]aving second thoughts about the results of a valid settlement
agreement does not justify setting aside an otherwise valid
agreement,” Young v. FDIC, 103 F.3d 1180, 1195 (4th Cir. 1997),
and the fact that the agreement is not in writing does not render it
unenforceable, Alexander v. Industries of the Blind, Inc., 901 F.2d
40, 41 (4th Cir.1990).
Hensley v. Alcon Laboratories, Inc., 277 F.3d 535, 540 (4th Cir. 2002) (citations omitted). See also,
Rauch Industries, Inc. v. Christopher Radko, et al., 3:07CV197-GCM, Document No. 194
(W.D.N.C. Sept. 20, 2010) and Bader v. Sossoman, 2:09CV049-MR, Document No. 35 (W.D.N.C.
Sept. 8, 2010).
Under the circumstances of this case, the undersigned finds that adopting Plaintiff’s
“...Motion For Protective Order...” in full would make the Court’s determination of whether there
was a settlement agreement here, and what its terms and conditions were, extremely difficult, if not

3

impossible. The evidence Defendant proposes to submit to support its claim, including the
economic terms, appears relevant to a determination of whether the parties had an agreement on
November 22, 2011.
Plaintiff’s arguments for restricting and/or redacting the information filed under seal are not
persuasive, particularly in light of Plaintiff’s own representations to this Court on November 22,
2011 that “Prospect and ASA (collectively the ‘Settling Parties’) have agreed to the principal terms
of a settlement agreement, but require additional time to complete the drafting and execution of the
settlement agreement.” (Document No. 46). Moreover, Plaintiff on December 29, 2011, again
represented to the Court that an agreement had been reached and that Plaintiff needed additional
time “to discontinue this action as to ASA.” (Document No. 60).
Based on the foregoing, the undersigned will grant Defendant’s motion to seal, grant
Plaintiff’s protective order to the extent it requests that Defendant’s proposed motion to enforce
settlement agreement and attached documents be sealed, and deny Plaintiff’s protective order to the
extent it seeks to limit and/or redact Defendant’s proposed submissions.
It is the Court’s intention at this time to resolve the dispute over whether the parties reached
a settlement agreement, assuming Defendant’s proposed motion to enforce settlement agreement
is expeditiously filed, prior to ruling on the pending motions to dismiss. The undersigned further
observes that there is no dispute that even if these parties did not reach a settlement agreement, they
at least came very close. In addition, other recent filings suggest that Plaintiff and Defendant
Houlihan Smith & Company, Inc. also made significant progress toward settlement. See (Document
Nos. 40, 56, 62). All these parties are respectfully encouraged to consider redoubling their efforts
to resolve their disputes on mutually agreeable terms, in lieu of further Court intervention.

4

IT IS, THEREFORE, ORDERED that Defendant Adkisson Sherbert Associates, P.A.’s
“Motion To Permit Filing Of Materials Under Seal” (Document No.74) is GRANTED.
IT IS FURTHER ORDERED that “Plaintiff Prospect Capital Corporation’s Motion For
A Protective Order...” (Document No. 79) is GRANTED in part and DENIED in part, as described
herein.
Signed: March 26, 2012

5