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Ice Glass Prints Florida, LLC v. Surprize LLC.

April 27, 2010

ICE GLASS PRINTS FLORIDA, LLC, AND FOX FAMILY, LLC., PLAINTIFFS,
v.
SURPRIZE LLC., SURDEC LLC., ART CRYSTAL LTD., ART CRYSTAL II ENTERPRISES, INC., PAUL RAMSDEN AND ARTHUR MOSTOW. DEFENDANTS.



The opinion of the court was delivered by: Wayne R. Andersen District Judge

MEMORANDUM OPINION AND ORDER

On November 24, 2009, Magistrate Judge Schenkier issued his report and recommendation concerning plaintiffs' motion to enforce the settlement agreement in this case [144]. Plaintiffs/counter-defendants Ice Glass Prints Florida, LLC, Robert Fox and Fox Family LLC (collectively the "Fox Parties") and defendants Surdec LLC and Paul Ramsden (the "Ramsden Parties") filed a joint motion to enforce an oral settlement agreement, and defendants/counter-plaintiffs Arthur Mostow, Art Crystal Ltd. and Art Crystal II Enterprises, Inc. (collectively the "Mostow Parties") opposed that motion. We referred this motion to Judge Schenkier since he conducted the settlement mediation with the parties on May 22, 2009. Judge Schenkier recommends that plaintiffs' motion to enforce the settlement agreement be granted. After careful consideration of the motion to enforce the settlement agreement, Judge Schenkier's findings of fact and conclusions of law, and defendants' objections thereto, this court hereby adopts in full Judge Schenkier's report and recommendation.

BACKGROUND

Judge Schenkier's report and recommendation includes an extensive factual background regarding the events at issue in the instant motion to enforce the settlement agreement. Judge Schenkier supervised the settlement proceedings in this case, and he provided a detailed outline of the events that transpired from the date of the mediation through ruling on the motion to enforce the settlement agreement. Judge Schenkier's ruling was based on his own notes from the mediation, statements made in open court by the lawyers and emails exchanged by the lawyers, term sheets exchanged by the parties, affidavits and other evidentiary material submitted to the court. We have reviewed the record in its entirety, and we are satisfied with, and agree with, Judge Schenkier's findings of facts. Therefore, we adopt Judge Schenkier's recitation of the factual events as our own.

On May 22, 2009, Judge Schenkier conducted a mediation in this case. The principals of all the parties with settlement authority and their attorneys attended the mediation. At the end of the mediation, Judge Schenkier found that the parties had reached a settlement on all issues with one term remaining open as to whether the Art Crystal would be able to continue to use certain trade names, marks and logos that Mr. Mostow claimed infringed his alleged trademarks. 11/24/09 Transcript ("Tr.") at 5-6. The parties left the mediation with instructions from Judge Schenkier to resolve the final issue and report back to the court on June 8, 2009.

On June 8, 2009, the parties participated in a conference with Judge Schenkier at which time the parties reported that a settlement had been reached, and the open trademark issue had been resolved. Tr. 6-7. Judge Schenkier noted that the parties did not say that reducing the settlement to a written document was a condition precedent to the settlement agreement. Tr. at 7.

Thereafter, the parties exchanged term sheets for the settlement with counsels' comments. See generally Tr. at 10-25.

Then on July 8, 2009, there was a status hearing with the court at which the parties reported to Judge Schenkier that a dispute had arisen about reducing the settlement to writing because Mr. Mostow was insisting that the Ramsden Parties' license for technology be exclusive rather than nonexclusive. Tr. at 26. Judge Schenkier noted at that status that the parties had not agreed that Ramsden Parties' license for technology be exclusive rather than nonexclusive. Judge Schenkier set the matter for a status hearing on July 22nd to give the parties time to finalize the settlement documentation, and the court further ordered that, if the parties were not able to accomplish that, then Mr. Mostow would be required to personally attend the hearing.

At the July 22nd hearing, the parties reported that they had not been able to advance their efforts to document a settlement. Mr. Mostow attended the hearing as directed, and his attorneys filed a motion to withdraw as counsel for the Mostow Parties which was granted. Mr. Mostow requested time to find new counsel. On September 15, 2009, the Fox Parties and the Ramsden Parties filed their joint motion to enforce the settlement agreement. The Mostow Parties, acting through new counsel, objected to the motion to enforce the settlement.

LEGAL STANDARD

In considering the report and recommendation of a magistrate judge and a party's objections to that report, a district court must "determine de novo any part of the magistrate judge's disposition that has been properly objected to." FED. R. CIV. P. 72(b)(3). This "de novo determination" does not require a new hearing, but simply means that the district court must give "fresh consideration to those issues to which specific objections have been made." Rajaratnam v. Moyer, 47 F.3d 922, 925 n.8 (7th Cir. 1995)(citation omitted)."If no objection or only partial objection is made, the district court judge reviews those unobjected portions for clear error." Johnson v. Zema Syst. Corp., 170 F.3d 734, 739 (7th Cir. 1999). With this standard in mind, we now turn to the motion to enforce the settlement agreement.

DISCUSSION

Judge Schenkier recommends enforcement of the settlement agreement based upon two legal conclusions: (1) the parties reached an agreement on the material terms of the settlement; and (2) defendants' execution of the settlement documents was not a condition precedent to a binding agreement. Judge Schenkier also made a factual determination, based on the record, that counsels' representations on behalf of the Mostow Parties were authorized.

The Mostow Parties filed specific objections to Judge Schenkier's report and recommendation, through new counsel, on December 9, 2009. Specifically, the Mostow Parties argued that: (1) Arthur Mostow did not provide his counsel with the necessary or express authority to enter into a settlement agreement; (2) the parties' continued negotiations after the mediation resulted in a series of offers and counteroffers that had the legal effect of extinguishing the original settlement proposal; and (3) Judge Schenkier erred in finding that a settlement had been reached because the purported settlement agreement was incomplete and lacking in ...


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