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Marino Institute of Continuing Legal Education, Inc. v. Issa

United States District Court, Second Circuit

December 20, 2013

OMAR ISSA, et al., Defendants.



On June 1, 2012, Plaintiff Marino Institute of Continuing Legal Education, Inc. ("Marino" or "Plaintiff"), brought claims under New York State law, 18 U.S.C. § 1030, 17 U.S.C. § 101, and 15 U.S.C. § 1125(a) against several defendants, including Omar Issa ("Issa") and his company, Lionyx Solutions Corp. ("Lionyx") (collectively, "Defendants"). Broadly speaking, Plaintiff alleged theft and misappropriation of its continuing legal education ("CLE") programs and proprietary customer list. Plaintiff settled with all defendants but Issa and Lionyx in the first six months of 2013, and reached a resolution with these two Defendants on August 14, 2013; the resolution was transcribed contemporaneously by a court reporter, and was reported by the parties to the Court as a settlement of the case.

Defendants now assert that the parties did not enter into a final agreement on August 14, 2013, and, thus, that there was no settlement. Plaintiff, by contrast, has moved to enforce the August 14 agreement. For the reasons set forth in the remainder of this Opinion, Plaintiff's motion is granted.


A. Factual Background[1]

1. Plaintiff's Complaints and Its Settlements with Other Defendants

Plaintiff filed its first complaint in this matter on June 1, 2012, naming as defendants Issa, Lionyx, IPLS Global ("IPLS"), MP Innovations, Inc. ("MP Innovations"), and Matt Partain ("Partain"). (Dkt. #1). The gist of the complaint was that, in or about September 2011, while working for Plaintiff, Issa conspired with the other defendants to access a computerized database containing Plaintiff's historical sales information, client lists, meeting and other CLE materials - all of which Issa then used to solicit Plaintiff's clients to participate in competing CLE programs.

Plaintiff filed an amended complaint on January 23, 2013, adding as defendants IMS Labs, LLC ("IMS"),, Inc. ("iContact"), and Vocus, Inc. ("Vocus"), but the gist of its claims remained the same. (Dkt. #28). A second amended complaint, substantively indistinct from its predecessor, was filed on January 29, 2013 (the "Complaint"); it is the operative complaint in this action. (Dkt. #38).

In late March 2013, Plaintiff resolved its claims against iContact and Vocus, and a stipulation of dismissal was executed removing those parties from the case. (Dkt. #57, 58, 59). Three months later, in June 2013, Plaintiff resolved its claims against Partain, MP Innovations, and IMS, and a second stipulation of dismissal was executed to that effect. (Dkt. #64). With particular respect to Defendants, however, Plaintiff sought permission in April 2013 to file a motion for partial summary judgment as to Counts III, IV, and V of the Complaint, arguing that discovery had only confirmed that Defendants had misappropriated Plaintiff's customer contact list. (Dkt. #60). The Court denied permission, deeming the request to be premature and noting that the proposed motion failed to address all of the claims. ( See generally Dkt. #60, 61).[2]

The case was reassigned to the undersigned on June 24, 2013. (Dkt. #65). The Court then ordered the parties remaining in the case, i.e., Plaintiff and Defendants, to submit a joint status letter. (Dkt. #66). The parties submitted the joint letter on August 5, 2013. (Dkt. #67). Of particular significance to the instant motion, (i) the parties related to the Court that "[b]oth parties continue settlement discussions and believe an amicable resolution can be reached"; and (ii) Plaintiff related that it was seeking more than $320, 000 in compensatory damages from Defendants. ( Id. at 4-5).

2. The August 14, 2013 Oral Agreement

Plaintiff, Defendants, and their respective counsel met for a settlement conference on August 14, 2013, and reached an oral agreement that day. (Pl. Oct. 15 Letter; Aug. 14 Tr.). The agreement was transcribed by a court reporter, by phone. (Aug. 14 Tr.). The parties dispute the enforceability of this agreement.

The agreement reached on the record noted that "[i]t is the intention of the parties that all of the material terms of the agreement as set forth as we go on will be subject to a written long-form agreement, " but that the written agreement would be "based on the material terms as agreed to today." (Aug. 14 Tr. 4). Joseph Marino, as representative for Plaintiff, then read the substantive terms of the agreement into the record, without contradiction from Defendants or their counsel. These terms included provisions that, for the next three years, (i) New York, New Jersey, and Pennsylvania would become the exclusive jurisdictions for Marino CLE programs; (ii) Bridge the Gap (Issa's company) would be the exclusive outside sales agent for Plaintiff's CLE programs in those states; (iii) Bridge the Gap would not sell its own programs or any outside vendor programs in NY, NJ, and PA, except subject to pre-existing 2013 CLE dates Issa had arranged; (iv) the parties agreed that "in New York, New Jersey, and in Pennsylvania we are going to come to terms as to the sharing of revenue of the programs that we are running, as to both the live and the on-line content"; and that (v) Issa would refrain from selling to certain client e-mail addresses. ( Id. at 4-5). The parties further noted that "[i]t is the intention of the parties to work out an agreement whereby those Issa courses [i.e., CLE courses that were previously-scheduled in August, September, October, November, and December 2013] will either be combined with Marino, or crosssold, and that those dates are not a breach of the exclusivity period." ( Id. at 5). Finally, the parties agreed to file a stipulation of discontinuance with the Court, and agreed that "the long-form agreement will be negotiated, finalized, and signed in ten days or less, and Mr. Nesci [Vincent Nesci, Defendants' then counsel] has asked that it be less than ten days." ( Id. at 6).

On August 26, 2013, the parties jointly notified the Court by phone that they had reached a settlement. (Dkt. #68). The Court entered a 30-day Order that day, thereby closing the case. ( Id. ). Shortly thereafter, Plaintiff's counsel, Dorothy Weber, prepared a stipulation of discontinuance, which was subsequently signed and returned by Nesci. (Stip. of Discontinuance).[3]

3. Circulation of the Long-Form Settlement Agreement

On August 26, 2013, Plaintiff's counsel prepared a long-form settlement agreement, which - as explicitly contemplated by the parties - closely tracked the agreement reached on the record on August 14, 2013. (Pl. Sept. 25 Letter (Dkt. #69); Long-Form Agreement). Notably, the agreement also left open the ongoing business arrangement, stating: "[i]n New York, New Jersey and in Pennsylvania the Issa Defendants and Plaintiff shall negotiate and execute a commission agreement as soon as practicable." (Long-Form Agreement § 1(a)). The long-form agreement similarly left open the fall 2013 CLE arrangements, stating that with regard to those previously-scheduled CLEs, "[i]t is the intention of the Parties to work out an agreement whereby those Issa Defendants' courses will either be combined with Plaintiff's courses, or crosssold, and that those dates are not a breach of the exclusivity provision." ( Id. ). Defendants' lawyer agreed that the Long-Form Agreement "exactly tracked" the agreement reached on August 14, 2013. (Oct. 3 Tr. 3).

Between August 14, 2013, and September 6, 2013, Issa engaged in discussions with Michael Marino in person and on the phone several times regarding their future business relationship. (Def. Oct. 29 Letter (Dkt. #79); Issa Aff. Ex. 1). The parties' attorneys decided not to involve themselves in these business discussions. (Oct. 3 Tr. 4).

In a sworn affidavit submitted to the Court in connection with this motion, Issa stated that at some point in these business negotiations with Michael Marino, they disagreed regarding an upcoming CLE program Issa had planned at Hunter College in September. (Issa Aff. ¶¶ 4-6). Michael Marino called Issa to state that they could not work out a way to combine their programs at Hunter College, and that the Marinos would not hold a CLE program at Hunter College. ( Id. ¶ 5). However, according to Issa, the Marinos did hold a CLE program at Hunter College on the day of Issa's CLE program. ( Id. ¶ 6). Issa "understood these actions to mean that they were not acting and negotiating in good faith." ( Id.; Def. Oct. 29 Letter).

Plaintiff's counsel sent the settlement agreement to Defendants' counsel on September 9, 2013. (Pl. Sept. 25 Letter). Nesci forwarded it to his client around that time. Despite numerous requests from Plaintiff for the executed agreement, Nesci was unable to get in touch with Issa. Indeed, Nesci tried to contact Issa through Plaintiff. Specifically, on September 16, 2013, Nesci wrote to Plaintiff's counsel, Dorothy Weber, to ask her to check with her client Michael Marino, "as the last I heard he and Omar were working on something - exactly what I have no idea." (Weber Decl. Ex. B). Weber replied, "Let them worry about that agreement.... let's get the settlement signed so we can get the Stipulation filed." (Weber Decl. Ex. C). When Weber followed up with Nesci on September ...

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