EMI Corporation v. Opal

Filing 23

Memorandum of Opinion and Order: Joseph A. Opal's Motion to Enforce Settlement Agreement and for Fees (Doc. 20 ) is GRANTED in PART and DENIED in PART. The motion to enforce is GRANTED and the motion for fees is DENIED. Judge Patricia A. Gaughan on 3/10/16. (LC,S)

UNITED STATES DISTRICT COURT
NORTHERN DISTRICT OF OHIO
EASTERN DIVISION

EMI Corporation,
Plaintiff,
Vs.
Joseph A. Opal,
Defendant.

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CASE NO. 1:15 CV 1257
JUDGE PATRICIA A. GAUGHAN

Memorandum of Opinion and Order

INTRODUCTION
This matter is before the Court upon Joseph A. Opal’s Motion to Enforce Settlement
Agreement and for Fees (Doc. 20). This case involves the misappropriation of trade secrets. For
the reasons that follow, the motion to enforce is GRANTED and the motion for fees is DENIED.
ANALYSIS
The facts relevant to this motion are undisputed. The Court held a settlement conference
on February 11, 2016. At the conference, the parties discussed two possible resolutions of this
matter. The Court held a follow up telephonic status conference on February 29, 2016. At that
conference, counsel for defendant informed plaintiff and the Court that defendant had been
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offered a job selling “robotics.” Ultimately, defendant disclosed that plaintiff’s prospective
employment was with Absolute Robot, Inc. (“ARI”).
Later that day, plaintiff sent defendant the following letter:
During our settlement conference with [the Court] this morning, you advised that
[defendant] was willing to settle the referenced litigation with the express agreement that
for three years from the date of the settlement, he cannot work directly or indirectly1 for a
company that competes with [plaintiff] in the sales of end-of-arm tooling (“EOAT”)
and/or conveyor systems....
The letter further informed defendant that plaintiff had researched ARI and discovered
that ARI sells EOAT with its robots. The letter went on to note that “this information is very
concerning to [plaintiff]. [Defendant’s] veracity has proven to be suspect throughout this case.
Based on the information available, [plaintiff] is unwilling to agree to a settlement knowing that
[defendant] will be going to work for ARI” which shares office space with an entity that engages
“in the sale of FIPA’s EOAT products.”
Defendant responded by letter indicating that his employment with ARI does not involve
EOAT or conveyor systems. The letter further generally assures that defendant will not be
involved with the entity sharing office space with ARI and that defendant will not be reporting to
that location.
The following email exchange took place the next day:
Matt:
If [defendant] is employed by ARI, [plaintiff] cannot agree to a settlement of the case
under the terms discussed.

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Although not dispositive, the parties’ settlement discussions with
the Court focused on the fact that defendant could not contact
plaintiff’s clients either “directly or indirectly.”
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First, your disclosure of [defendant’s] employment with ARI failed to mention that he
would be working in the location from which EPM Sales operates.... Finally, your letter
has very carefully avoided stating precisely what [defendant] will be required to sell if
employed by ARI. There is no affirmative statement that [defendant] would be employed
by ARI full-time exclusively selling ARI robots.
We need to contact [the Court] today and advise [it] that [plaintiff] is unwilling to settle
this matter under the term discussed if [plaintiff] insists on his proposed employment
with ARI...
Defense counsel then responded, “...as I thought I made clear, [defendant] will not be
working from the location from which EPM Sales operates. The following exchange ensued:
Matt:
This still does not address our concerns, especially affirmative statements as to what he
will de doing with ARI....
John

John, I have provided you with the relevant information, and you will do with it as you
please. I’m happy to set up a call with the judge, or however you’d like to proceed.

Matt:
So you are going to refuse to tell me precisely what [defendant] is going to be doing for
ARI. Is that because you have not asked, do not know, or are unwilling to detail. This
underscores [plaintiff’s] concern and lack of trust.
John

John, I think I’ve told you everything you’ve asked (and more). If you have questions,
please let me know.

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Matt:
You have not identified precisely what [defendant] is going to be doing at ARI. Is he
going to be exclusively selling robots full-time for ARI and will not be involved in
selling any other products? Simple question which has not been directly answered.
John

Matt:
I assume you will not be providing a response to this very simple, direct question. If I do
not receive and [sic] answer by 4:30 PM Eastern time, then I will contact [the Court’s]
courtroom deputy and advise her that we do not have a settlement and that counsel for the
parties need to speak with the judge.
John

John, forgive me for being out-of-pocket for a couple hours. [Defendant] is being hired to
devote his full-time attention to selling robots exclusively for ARI. I thought that had
already been made clear.

Matt:
Thank you for finally answering the question. I will draft the settlement agreement.
Hope [defendant] has been honest with you.
John

Based on these communications, defendant quit his current employment and accepted
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employment with ARI. Two days later, plaintiff’s counsel sent an email indicating that
“defendant’s potential employment with ARI would be in direct conflict with the main term and
very spirit of the settlement. [Defendant] would be working for a company, ARI, that competes
against [plaintiff] in EOAT sales.” The email goes on to state that “we do not have a settlement
if [defendant] insists on taking a position with ARI as proposed.”
The following morning, the Court held a telephonic conference call in which the parties
discussed defendant’s employment with ARI. The Court discussed with the parties clarifying the
settlement agreement to ensure that defendant could not work in any capacity in EOAT sales.
The Court noted that it would retain jurisdiction over the settlement. Twenty minutes later,
plaintiff’s counsel called defense counsel and informed him that plaintiff “is unwilling to settle
this matter should [defendant] work for ARI.”
Defendant now moves to enforce the settlement agreement and plaintiff opposes the
motion.
Defendant argues that the parties reached an agreement with respect to the material terms
of the settlement. According to defendant, the parties agreed to discontinue the litigation
provided defendant resigned his employment with FIPA, and promised not to compete with
[plaintiff] in the sale of either EOAT or conveyor systems for a period of three years. Defendant
points to the string of emails in support of its position. According to defendant, the emails make
clear that plaintiff’s concern centered on what precisely defendant would be selling for ARI. In
response, plaintiff argues that the parties never agreed to the essential terms of the settlement.
According to plaintiff, it understood the primary term of the agreement to prevent defendant
from working for any company that competes in the EOAT market regardless of the tasks

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actually performed by defendant. Plaintiff claims that defendant understood the term to mean
that defendant could work for a competitor, provided he did not sell EOAT or conveyor systems.
As such, there was no meeting on the minds and, therefore, no enforceable settlement agreement.
Before enforcing a settlement, a district court must conclude that agreement has been
reached on all material terms. Ordinarily, an evidentiary hearing is required where facts
material to an agreement are disputed. However, no evidentiary hearing is required
where an agreement is clear and unambiguous and no issue of fact is present. Thus,
summary enforcement of a settlement agreement has been deemed appropriate where no
substantial dispute exists regarding the entry into and terms of an agreement.
Michigan Reg'l Council of Carpenters v. New Century Bancorp, 99 Fed App'x 15, 20 (6th
Cir.2004)(citations and quotations omitted). As plaintiff itself notes, “the Sixth Circuit has
repeatedly held that a federal court may enforce agreements entered into in settlement of
litigation pending before them, even if that agreement has not been reduced to writing....”
Brockwell v. Beachwood City School Dist., 2008 WL 918266 at *6 (N.D. Ohio March 31, 2008).
As an initial matter, the Court finds that an evidentiary hearing is not necessary in that
the parties do not dispute the relevant facts. Nor did any party request a hearing.
Upon review, the Court finds that the parties reached an enforceable settlement
agreement pursuant to which defendant must resign his employment with FIPA, and is
prohibited from competing with [plaintiff] in the sale of either EOAT or conveyor systems for a
period of three years. The Court finds that the email exchange between counsel for plaintiff and
defendant clearly and unambiguously conveys that the parties agreed to this term. Plaintiff now
argues that it understood the term to mean that defendant could not work for any entity that
competes with plaintiff in the EOAT business. This interpretation is directly contradicted by the
contents of the parties’ correspondence and the discussions that took place at the settlement
conference. On February 29, 2016, counsel for plaintiff acknowledged that it knew that “ARI
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sells EOAT with its robots.” The correspondence focused on confirming the nature of
defendant’s duties if he were to accept employment with ARI. Obviously, however, this would
be entirely irrelevant if the parties’ agreement prevented defendant from accepting employment
with any EOAT competitor regardless of the nature of defendant’s job duties. Because plaintiff
knew that ARI sold EOAT with its robots, any employment would be prohibited. Yet, upon
learning that defendant’s job duties would be limited to selling robots for ARI, plaintiff
responded, “Thank you for finally answering the question. I will draft the settlement
agreement.” Based on this correspondence, the Court finds that the parties reached a settlement
on the essential terms of the agreement. The parties agreed that defendant would resign his
employment with FIPA and would not compete with plaintiff in EOAT or conveyor systems
businesses for a period of three years. This is entirely consistent with this Court’s notes and
recollection of the events that transpired during various court proceedings. Moreover, in direct
reliance on these representations, defendant quit his employment with FIPA and accepted a
position with ARI.
The Court concludes, however, that sanctions are not warranted.
CONCLUSION
For the foregoing reasons, Joseph A. Opal’s Motion to Enforce Settlement Agreement
and for Fees (Doc. 20) is GRANTED in PART and DENIED in PART. The motion to enforce is
GRANTED and the motion for fees is DENIED.

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IT IS SO ORDERED.

/s/ Patricia A. Gaughan
PATRICIA A. GAUGHAN
United States District Judge
Dated: 3/10/16

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