Opinion
Case No. 08-CV-10380.
February 22, 2008
ORDER GRANTING PLAINTIFF'S MOTION FOR TRO
On February 22, 2008, a hearing was held on plaintiff's motion for a temporary restraining order. For the reasons stated on the record, plaintiff's motion hereby is GRANTED to the extent that defendants McCarthy and Air Filter Sales Services — Denver, Inc. (AFSS) hereby are ORDERED to comply with the terms of the settlement agreement dated August 20, 2007 and attached hereto. McCarthy is further ORDERED to contact attorney Paul Glendon before contacting ANY customer to see if they are on the TFS "customer list." If a prospective customer is on TFS's "customer list," then McCarthy is enjoined from soliciting said customer. The failure of McCarthy or AFSS to comply with this order may subject them to contempt of court.
SO ORDERED.
SETTLEMENT AGREEMENT
This Settlement Agreement (hereinafter "Settlement" or "Agreement") is entered into as of the 20 day of August, 2007, between Total Filtration Services, Inc. (hereinafter referred to as "TFS" or "Plaintiff"), who shall mean and include any and all of TFS's affiliated companies, TFS's agents, employees, representatives, predecessors, successors, subsidiaries, divisions, officers, directors, trustees, assigns, affiliates and attorneys; Tim McCarthy ("McCarthy"), who shall mean and include his agents, employees, attorneys, heirs, heirs-at-law, representatives, successors-in-interest and assigns; and Air Filter Sales Services — Denver, Inc. ("AFSS"), who shall mean and include any and all of AFSS's affiliated companies, AFSS's agents, employees, representatives, predecessors, successors, subsidiaries, divisions, officers, directors, trustees, assigns, affiliates and attorneys. TFS, McCarthy, and AFSS will collectively be referred to as the "Parties."
RECITALS UNDERLYING THE SETTLEMENT
RECITAL A. On or about June 26, 2007, TFS instituted a civil action by filing a Complaint against McCarthy in the U.S. District Court for the Eastern District of Michigan (Case No. 2:07-cv-12706). Such civil action instituted by TFS against McCarthy, and any and all claims, causes of action, counterclaims, third party claims, issues, or facts concerning any of the Parties' claims against each other, which arise from or by reason of the facts alleged in such civil action, either known or unknown, up to and including the date of this Settlement, that the Parties raised, or could have raised, in Case No. 2:07-cv-12706 will hereinafter be referred to, collectively and individually, as "the Civil Action."
RECITAL B. The undersigned have agreed to settle on the terms set forth in this Agreement and to dismiss the Civil Action with prejudice and without costs or fees to any party.
RECITAL C. TFS, McCarthy, and AFSS warrant and represent that they have full legal rights to execute this Settlement, that they have not transferred, assigned, or conveyed any interest in any claim or matter relating to the Civil Action such that said person or entity could in any way assert or revive any claim put to rest by the terms of this Settlement, and that they shall defend, indemnify and hold the other party harmless in any claim made against or demand upon the other party from anyone claiming to have any rights or assigned interest in such claims. The Parties further warrant and represent that they have no knowledge of any person or entity who could reassert any claim against them that this Settlement will forever put to rest.
RECITAL D. TFS, McCarthy, and AFSS warrant and represent that before signing this Agreement, they have carefully read this Settlement and fully understand its terms, contents and effect, and that they have had the benefit and advice of their attorneys regarding this Settlement and the tax consequences of this Settlement and have relied entirely on their judgment and the advice of their attorneys in voluntarily executing this Settlement.
NOW, THEREFORE, in consideration of the mutual promises contained herein, the Parties hereto agree as follows:
1. INCORPORATION OF RECITALS . All of the above Recitals are hereby incorporated into this Settlement by reference as though set forth herein verbatim.
2. CONSIDERATION . In consideration of the full and complete release of liability by each party, as set forth below, and in further consideration of the mutual promises contained herein:
A. MCCARTHY AGREES THAT :
(1) McCarthy is enjoined, directly or indirectly, from:
(a) Soliciting, performing services for, accepting business from, or otherwise interfering with, any TFS customer on behalf of himself or a competing business (including, but not limited to, AFSS) through August 15, 2008.
"TFS customer" shall include any individual or entity that TFS performed services for or made any sales to in the last two (2) years prior to August 15, 2007. TFS customers are to be set forth in the Current Client List confidentially provided to a neutral third party who is agreed to by the Parties, and an invoice for each such customer will be confidentially provided to the neutral third party. Before McCarthy undertakes any solicitation or provides any services, or participates in the solicitation or providing of services for any entity before August 15, 2008, he shall contact the neutral third party, provide the name of the entity, and the neutral third party shall determine whether the entity is a TFS customer and so inform McCarthy. If, and only if, there is a match between the identity of McCarthy's potential customer and a customer identified in the neutral third party's copy of TFS customer list, TFS will be informed forthwith by the neutral third party of the identity of the customer so matched. If McCarthy disputes that a customer is a TFS customer, the third party neutral shall send McCarthy a copy of the TFS invoice information for that customer, and the invoice information shall be redacted so that only the name of the disputed customer and the dates serviced will appear. The letter agreement with the neutral third party shall be in the form attached as Exhibit A. In the event the entity is a current TFS customer, McCarthy shall not engage in the activity set forth in this paragraph.
(b) Soliciting, being involved in the recruitment or hire of, or otherwise interfering with any TFS employee for a competing business (including, but not limited to, AFSS) through August 15, 2009.
(c) Ever using or disclosing any of TFS's confidential, proprietary or trade secret information or property.
(2) In the event McCarthy receives any requests from or is contacted by a TFS customer through August 15, 2008, McCarthy agrees that he will state to such customer: "I am sorry. I can't help you." McCarthy further agrees that he will say nothing further to such customer.
(3) McCarthy further agrees that he will disconnect and never use the cellular phone number, (303) 885-3961, which is the same number that he used while an employee of TFS.
(4) McCarthy represents and warrants that he has no TFS information, documents or property in his possession and to the extent he had any such information, documents or property, he has returned same to TFS's counsel. McCarthy further represents and warrants that he has not disclosed any TFS confidential information to any person or entity, including but not limited to AFSS.B. AFSS AGREES THAT :
(1) AFSS will send another employee, other than McCarthy, to serve or solicit any accounts that TFS has serviced or made sales to in the last two years, August 15, 2005 to August 15, 2007, that matches any customer that AFSS has ever sold to or serviced, until August 15, 2008.C. TFS, IN TURN AGREES TO :
(1) Dismiss the Civil Action, with prejudice, in the form attached hereto as Exhibit B.
(2) Provide the neutral third party with TFS's list of customers that have been serviced by TFS from August 15, 2005 through August 15, 2007 by August 31, 2007. TFS may later amend this list if it later discovers it inadvertently did not include any TFS customer in the list serviced by TFS from August 15, 2005 to August 15, 2007.
(3) In connection with McCarthy's agreement in paragraph A(3), TFS agrees to pay for McCarthy's expenses related to the order of new business cards, the purchase of a new cellular phone, and any termination charges for the disconnection of his current cellular phone.
3. FULL AND FINAL RELEASE AND WAIVER . In consideration of the consideration provided in paragraph 2 above and the other mutual promises and covenants contained in this Settlement, the Parties hereby release acquit and forever discharge each other from any and all causes, causes of action, claims, counterclaims, third party claims, liens, costs, injuries, expenses, agreements, damages, and demands whatsoever, at law or in equity, which the Parties have against each other, upon or by any reason of anything whatsoever which has occurred prior to and through the date of this Settlement, including, but not limited to. all claims that in any manner touch upon or concern the Civil Action or TFS's previous relationship with McCarthy.
McCarthy understands that he may have suffered injuries, damages and expenses that are unknown to him at present or that unknown injuries, damages or expenses may arise, develop or be discovered in the future. McCarthy acknowledges that the consideration as specified in paragraph 2 above, is intended to and does release and discharge TFS from any claims by McCarthy in regard to such unknown injuries, damages, and expenses or future developments, including the effects or consequences thereof and regardless of mistake of fact, or mistake of law, and McCarthy does hereby waive any rights to assert in the future any claims against TFS accruing prior to and up through the date of the agreement, not now known or suspected even though if such claims were known, such knowledge would materially affect the terms of this Settlement. However, the Parties agree that they can bring claims for breach of this Agreement.
4. DENIAL OF LIABILITY . The Parties acknowledge that this is a settlement of disputed claims, and that the Parties have always denied any and all liability to each other, and that the execution of this Settlement and performance of the acts required herein by each party does not constitute an admission by any party. It is further acknowledged that the Parties hereto have entered into this Settlement merely to avoid further litigation.
5. CONFIDENTIALITY OF TERMS OF THIS AGREEMENT . The Parties to this Agreement shall not disclose the terms of this Agreement and shall maintain the terms of this Agreement as confidential except insofar as disclosure might be required in connection with compliance with any court process or government or statutory requirements, or to enforce the terms of this Agreement. The Parties also further agree to direct their attorneys to maintain the confidentiality of this Agreement.
6. DISMISSAL OF LAWSUIT . It is further understood and agreed that the Civil Action in the U.S. District Court Eastern District of Michigan, Case No. 2:07-cv-12706, shall be discontinued and dismissed with prejudice by entry of a Stipulated Order of Dismissal with Prejudice and without Costs or Attorneys' Fees as to Any Party, in the form attached hereto as Exhibit B, and this Order of Dismissal with Prejudice and without Costs or Attorneys Fees as to Any Party shall bar any further action, except to enforce the terms of this Agreement.
7. DRAFTING OF DOCUMENT AND RELIANCE . The Parties and their counsel have reviewed and participated in the drafting of this Settlement. For purposes of the principles of law, no party shall be deemed or claim to be the drafter of this Settlement. Accordingly, the Parties warrant, represent, and agree that they are not relying on the advice of the opposing attorneys as to the legal (including tax) consequences of this Settlement. Furthermore, the Parties hereby release and discharge each others attorneys from any and all claims, rights, damages, costs, including reasonable attorneys' fees or expenses of any nature whatsoever that may hereafter arise by reason of the legal (including tax) consequences of this Settlement.
8. GOVERNING LAW . This Agreement shall be construed in accordance with, and governed by the provisions of the laws of the State of Michigan applicable to contracts made and entered into within such state, and without reference to choice of law principles. Further, the Parties agree that jurisdiction shall remain in the U.S. District Court for the Eastern District of Michigan and the Parties further agree that any dispute arising out of this Agreement, or a claimed breach of this Agreement, shall only be brought in the U.S. District Court for the Eastern District of Michigan or the Oakland County Circuit Court in Michigan.
9. STIPULATED ORDER . The parties agree to stipulate to entry of the attached Stipulated Order of Dismissal with Prejudice. Exhibit B, and will execute same concurrently herewith.
10. CAPTIONS . Captions to paragraphs and sections of this Settlement have been included solely for the sake of convenient reference and are entirely without substantive effect.
11. ENTIRE AGREEMENT . This Settlement contains the entire agreement among all Parties in regard to the matters set forth herein. The terms of this Settlement are contractual and not a mere recital, and there are no agreements, understandings, or representations of any kind made by the Parties to this Settlement or their attorneys except as expressly stated herein.
Each provision of this Settlement is intended to be severable. If any term or provision is held to be invalid, void or unenforceable by a court of competent jurisdiction for any reason whatsoever, such ruling shall not affect the validity of the remainder of this Settlement.
This Settlement may be executed in several counterparts and each such counterpart shall be deemed an original. Execution is complete at the time of the last necessary signature.
IN WITNESS WHEREOF, Total Filtration Services, Inc., Tim McCarthy, and Air Filter Sales Service — Denver, Inc., have executed this Settlement Agreement as their free act and deed. TIM MCCARTHY 20th August
Subsoribed and sworn to before me this day of , 2007. _____________________________________ _____________________________________________ Notary Public TOTAL FILTRATION SERVICES, INC. AIR FILTER SALES SERVICE — DENVER, INC. 20 August Scribed and sworn to before me this ___ day of ___________, 2007. _______________________________________ By: ____________________________________ Notary Public Its: _____ ____________________________________________________________________ Scribed and sworn to before me this day of , 2007. _______________________________________ By: ____________________________________ Notary public Its: _____ ____________________________________________________________________ TOTAL FILTRATION SERVICES, INC. 20 August AIR FILTER SALES SERVICE — DENVER, INC. Scribed and sworn to before the this day of , 2007. _____________________________________ By: _____________________________ Notary Public Its: _____________________________ Scribed and sworn to before me this ____ day of __________, 2007. _____________________________________ By: _____________________________ Notary Public Its: _____________________________