Free Memorandum in Support of Motion - District Court of Connecticut - Connecticut

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IN THE UNITED STATES DISTRICT COURT FOR THE DISTRICT OF CONNECTICUT At Hartford CENTRIX, INC. Plaintiff/Counter-Defendant v. Civil Action No. 3:03-CV-703(CFD)(WIG)

ANDON BRUSH COMPANY, INC., Defendant/Counter-Plaintiff

PLAINTIFF, CENTRIX, INC.' MEMORANDUM IN SUPPORT OF ITS S MOTION TO ENFORCE SETTLEMENT AGREEMENT AND TO STAY DISCOVERY PENDING RESOLUTION OF THIS MOTION AND/OR IN THE ALTERNATIVE TO EXTEND THE DISCOVERY DEADLINE OF THE SCHEDULING PLAN FILED ON OR ABOUT AUGUST 25, 2003

Arthur T. Fattibene, CT 06916 Paul A. Fattibene, CT 12760 Attorneys for Plaintiff, Centrix, Inc. 2480 Post Road Southport, CT 06890 Tel: 203-255-4400; Fax: 203-259-0033

Oral Hearing Requested

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I.

NATURE OF PROCEEDINGS In the joint Report of Parties Planning Meeting filed

on or about August 25, 2003, the parties requested an early settlement conference with a Magistrate Judge. On August

28, 2003, the Court referred the case to Magistrate Judge Garfinkel for a settlement conference. On October 7, 2003,

Judge Garfinkel issued a Settlement Conference Order and scheduled a settlement conference for December 3, 2003 at 10:00 a.m. At the December 3, 2003 settlement conference,

the respective parties were represented by their respective principals, viz. Dr. William B. Dragan, CEO and Melvin Drumm, President of Centrix, together with their counsel of record, and Mr. Robert Newell, President of Andon and his counsels, Matthew C. Mason and Kenneth L. Winters. At the December 3, 2003 settlement conference, the parties discussed settlement in some detail with Judge Garfinkel. The parties made some progress. At the

conference, the parties did agree that: 1. Andon would immediately cease its alleged

infringing acts and would cease any further manufacture and sale of the accused products, and 2. That neither Andon and/or its president, Mr.

Newell, invented any part of the subject matter of the patents in suit.

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The only substantial issue that was not resolved at the settlement conference was the monetary issue. Initially, Centrix demanded a monetary payment of Fifteen Thousand ($15,000.00) Dollars, which was rejected by Andon. Centrix then lowered its monetary demand to only $1,000.00. Andon indicated it would take the monetary offer of $1,000.00 under advisement. conference was adjourned. As a result, the settlement Before adjourning, Judge

Garfinkel requested that the parties update him on any further settlement talks by December 12, 2003. On December 12th, Andon' counsel copied the Court on a s letter to Centrix' counsel, attached as Exhibit 1, s advising that Andon agrees that: 1. " Andon Brush Company, Inc. will cease to

manufacture, sell, offer to sell or use its present " Cobra" brush as a disposable dental brush, and will agree not to otherwise infringe any valid claims of U.S. Patent No. 5,001,803." 2. Andon Brush Company, Inc. makes no concession of

validity or infringement. 3. Andon Brush Company, Inc. and Robert Newell will

relinquish any claim of inventorship with respect to U.S. Patent No. 5,001,803, and

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4.

In exchange for the relinquishment of any claim of

inventorship, Centrix, Inc. will waive any and all claims for monetary compensation for any alleged infringement up to the time of signing the settlement agreement. On December 17, 2003, Andon was advised that Centrix would not waive the monetary demand of $1,000.00. Shortly thereafter Andon, on reconsideration, agree to make the payment of the $1,000.00 monetary demand, and Judge Garfinkel was so advised. See attached Exhibit 2.

On December 31, 2003, counsel for Centrix, on the understanding reached, reduced the settlement reached to written form and submitted the same to Andon and Judge Garfinkel. See Exhibit 3. Apparently, Andon took issue to

Centrix' December 31, 2003 Draft Agreement (Exhibit 3). s Between December 31, 2003 and January 16, 2004, the parties exchanged several revised draft agreements in an effort to finalize the written form of the settlement agreement reached. Andon now seeks to avoid the agreement reached by raising a new issue relating to the wording of the Stipulation of Dismissal with prejudice to which both parties had previously agreed upon.

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This Motion is therefore necessitated to enforce the settlement which the parties have, in fact, agreed to and which has been reduced to final form.

II.

STATEMENT OF FACTS (a) The Parties to the Suit

Plaintiff, Centrix, is a privately owned corporation organized under the laws of Delaware with offices located in Shelton, Connecticut. Centrix was founded and organized

by Dr. William B. Dragan, a practicing dentist, in 1970. Since then, Centrix has grown and is well recognized in the dental profession, both domestically and internationally, as a manufacturer and seller of innovative applicators and sundry other dental products. Over the years, Centrix has

accumulated a portfolio of at least one hundred or more U.S. and international patents relating to various dental products and brush type applicators. Defendant, Andon, is a corporation that was organized under the Laws of the State of Delaware on or about February 12, 1990. Centrix was instrumental in forming and

organizing Andon with two individuals, Gerald Robbins and Robert Newell, for the expressed purpose of supplying Centrix with the new and novel brush Centrix had invented for use by dentists and for which the patents in suit were

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granted.

Centrix has been successfully marketing the

patented brushes to the dental profession since September 1989. From February 1990 to the year 2000, Andon was

Centrix' sole supplier of the patented brushes. s Initially, the issues shares of Andon stock were equally divided between Centrix, Gerald Robbins and Robert Newell. On or about February 1, 2001, Gerald Robbins sold Centrix still

his interest in Andon to Robert Newell. retains its one-third interest in Andon.

In the year 2000, Centrix, for economic reasons and to maintain its market share, decided to make the patented brushes in-house, whereby Centrix ceased using Andon as its sole supplier for the Centrix' patented brushes. After Centrix ceased using Andon as Centrix' sole s supplier for the patented brushes, Andon nevertheless continued the manufacture of the patented brushes and commenced marketing the patented brushes to Centrix' s dental customers, thus giving rise to this lawsuit.

(b) Background Facts In November 1988, John J. Discko and Dr. William B. Dragan of Centrix conceived a novel brush construction for use by dentists, which was reduced to actual practice prior to December 2, 1988, and for which a patent application was

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filed on March 20, 1989.

The application was assigned SN

325,888 and is now U.S. Patent 5,001,803 (the ` 803 patent) in suit, which was granted March 26, 1991. Centrix also

secured a design patent, DES 329,142 (the ` 142 patent) for the brush design which is also in suit. In September 1989, Centrix entered into a supply agreement (Exhibit 4) with the Applicator Company of Riverdale, New Jersey whereby the Applicator Company agreed to supply Centrix with the novel brushes. At the time

Gerald Robbins and his cousin, Eric Robbins, were the principles of the Applicator Company. The Applicator

Company was a job shop manufacturing various types of applicators and brushes for others. Robert Newell was

employed by the Applicator Company as its plant manager responsible for operating and maintaining Applicator Company' brush making machines and equipment. s About December 1989 or January 1990, Centrix learned that the Applicator Company was on the verge of bankruptcy, and Centrix was about to lose its only source of supply for the patented brushes. In January 1990, Gerald Robbins,

Robert Newell and Centrix entered into discussions involving the forming of a new company whereby the new company would continue to supply Centrix with the novel brushes in view of the Applicator Company' imminent s

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bankruptcy, and thereby prohibit any interruption in the supply of said brushes to Centrix. As a result of these

discussions, the Andon Brush Company, Inc. was organized by February 1990 to supply Centrix with the new brushes Centrix had been aggressively marketing. Andon established its place of business in New Jersey, and its day to day business was managed by Robert Newell as President and Gerald Robbins as Vice President of Sales and Treasurer. Centrix, during Andon' formative period, s

provided Andon with management and financial expertise, and purchase orders for the new brushes to keep Andon financially solvent. To start Andon' brush making business, Andon s purchased a brush making machine which was designed and built by F&W Tool, a machine company then located in Brooklyn, NY for $50,000.00. Because time was of the

essence, Centrix paid F&W Tool an additional $5,000.00 premium for immediate delivery of the machine to insure an uninterrupted supply of brushes Centrix needed to meet the market demand. Upon F&W' delivery of the machine to Andon, Andon s immediately started to supply Centrix with the new brushes. For the next ten (10) years, Andon was Centrix' sole s supplier of the patented brushes. During these ten (10)

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years, Centrix also improved and expanded its brush line; as well as the market for such brushes both domestically and internationally. Over the years that Andon was supplying Centrix, Andon, at regular intervals, would increase its prices for the brushes until Centrix could not meet its competitor' s prices, causing Centrix to loose its market share. To prevent Centrix from losing its market share, Centrix made the decision that Centrix would invest in a brush making machine and produce the brushes in-house. Accordingly, Centrix invested approximately $400,000.00 in a state-of-the-art fully automatic brush making machine and commenced making its own dental brushes. Centrix' brush s

making machine was designed and manufactured by Adaptive Mfg. Technologies, Inc. of Long Island, New York. As a

result, Centrix phased out Andon as its sole supplier of the patented brushes. Sometime in the year 2000, Mr. Newell and Gerald Robbins met with Centrix to learn why Centrix purchase orders for brushes to Andon were diminishing. At this

meeting Andon was advised that Andon' pricing for brushes s was too high, causing Centrix to lose its market share as Centrix could not meet its competitors' prices. Centrix

also advised Andon that Centrix had purchased a brush

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making machine, and proceeded to show both Mr. Newell and Mr. Robbins, Centrix' new state-of-the-art brush making s machine that Centrix had purchased. Shortly thereafter, Gerald Robbins resigned from Andon Brush Company and sold his interest in Andon to Robert Newell. Centrix still retains its one-third ownership in

the issued shares of Andon. After Centrix ceased using Andon as its sole supplier for the patented brushes, Andon nevertheless continued to make the patented brushes and began selling them on Andon' s own account to Centrix' customers without the consent of s Centrix. Andon' unauthorized making and selling of the s

patented brushes caused Centrix to file the instant lawsuit.

The Patents In Suit The brush patents in suit are U.S. Letters Patent 5,001,803 (the ` 803 patent) granted March 26, 1991 on a patent application filed on March 20, 1989; and a U.S. Design Patent No. DES 329,142 (the ` 142 patent) granted September 8, 1992, attached hereto as Exhibits 5 and 6 respectively. The patented brushes have been widely

accepted by the dental profession and are being sold throughout the world in substantial numbers.

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The Accused Device After Centrix ceased purchasing its patented brushes from Andon, Andon commenced the marketing of the Centrix patented brush construction directly to Centrix' customers s and perhaps others on its own account without the consent of Centrix. Andon commenced the sale of the accused After supplying

brushes under its own COBRA brand name.

Centrix with Centrix' patented brushes for some ten (10) s years, Andon' sales of the patented brush under the COBRA s brand can only be deemed to be willful to the nth degree. Attached hereto as Exhibit 7 is an actual sample of the accused Andon COBRA brush.

Defendant' Estimated Sales s Since commencing the unauthorized manufacture and sale of the accused brushes (Exhibit 7), Andon admits to making and selling approximately $39,745.00 in gross sales of the accused brushes. However, in a recently published November

3-December 21, 2003 catalog of Benco Dental, a dental supplier, the accused Andon' COBRA brush is still being s advertised and sold by this dental supplier.

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(c) The Chronology of Events Leading Up to the Settlement Agreement Almost immediately following the filing of the lawsuit, the parties entered into direct settlement discussion. On July 14, 2003, the parties met in a face to

face meeting, together with their respective counsels in an effort to settle the litigation in an amicable manner. the time, Andon had not yet filed its Answer and Counterclaims. On October 7, 2003, Judge Garfinkel issued his Settlement Conference Order setting December 3, 2003 for the settlement conference. Centrix submitted its first draft of a proposed settlement agreement to Andon' then attorneys (McCarter & s English) on or about October 21, 2003, attached hereto as Exhibit 8. On October 27, 2003, Centrix received a revised version of the proposed settlement agreement from Andon' s then counsels, McCarter & English, in which the Centrix draft of October 21, 2003 was substantially altered. attached Exhibit 9. See At

On October 28, 2003, Centrix advised

Andon that its revised version of the proposed settlement agreement (Exhibit 9) was unacceptable.

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On or about November 6, 2003, it was discovered that Andon' attorneys, McCarter & English, had a conflict and s had to withdraw from the case. Consequently, the

settlement discussions that Centrix' counsel was having s with McCarter & English came to an abrupt end. At the Settlement Conference on December 3, 2003, Andon was represented by new counsel, Mr. Winters of the firm of Carella, Byrne, Bain, Gilfillan, Cecci, Stewart & Olstein. In discussing settlement at the settlement

conference on December 3, 2003 with Judge Garfinkel, the parties discussed various scenarios for resolving the dispute. After some discussion, the parties did advance

the settlement discussions and in the presence of Judge Garfinkel, and at which time the parties agreed that: (1) Andon agreed to immediately cease its alleged

infringing acts and would immediately cease the manufacture and sale of the accused infringing products. (2) Andon also agreed that neither Andon and/or its

president, Robert Newell, conceived or invented any part of the subject matter disclosed in the patents in suit. (3) Centrix also agreed to reduce its monetary demand

from $15,000 to $1,000.00. The only substantive issue that was not resolved was the matter of the monetary payment. As it appeared that

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Andon would not agree to any monetary payment, Judge Garfinkel adjourned the Settlement Conference with the understanding that the parties would continue their settlement efforts. Before adjourning, Judge Garfinkel

requested that the parties advise him of the status of their continued settlement talks by December 12, 2003. On December 12, 2003, Andon' new counsel, Mr. s Winters, advised Judge Garfinkel the terms of settlement agreeable to Andon were: (1) Andon would cease the manufacture and sale of the

accused products and agreed not to otherwise infringe the ` 803 patent. (2) (3) Make no concession of validity or infringement. That Andon and Robert Newell would relinquish any

claims of inventorship with respect to the ` 803 patent, and (4) Wanted Centrix to agree to waive all monetary See

compensation for any alleged past infringement. Exhibit 1.

On or about December 17, 2003, in a telephone conversation, Andon was advised that Centrix would not waive the monetary claim of $1,000.00. Andon was also

advised that the proposal submitted to Judge Garfinkel, Exhibit 1, was rejected by Centrix because it did not make

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any reference to the ` 142 design patent in suit (Exhibit 6). After Andon was informed that Centrix would not waive the monetary demand of $1,000, Andon' counsel immediately s thereafter, in a second telephone call, advised that on reconsideration Andon was agreeable to the $1,000 payment, in addition to the terms Andon had previously agreed to at the settlement conference, Exhibit 2, and on which Judge Garfinkel was also copied. Since the parties had now reached agreement on all of the substantive issues, Centrix, on December 31, 2003, advised Judge Garfinkel that the parties had reached a settlement and submitted to Andon with a copy to Judge Garfinkel, a written draft of the settlement agreement to memorialize the agreement reached, attached as Exhibit 3. Attached to the December 31, 2003 draft (Exhibit 3) as Exhibit A is the form of a Stipulated Dismissal with prejudice contemplated by the agreement (Exhibit 3). On January 8, 2004, Andon submitted to Centrix a revised version attached as Exhibit 10 of the Centrix December 31, 2003 draft agreement (Exhibit 3). On January 12, 2004, Centrix advised that Andon' s revised draft of January 8, 2004 (Exhibit 10) was unacceptable for the reason that Andon' revised draft s

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(Exhibit 10) was vague, ambiguous, indefinite and not final. Significantly, Andon did not take issue with the

Stipulated Dismissal with Prejudice attached as Exhibit A to Centrix' draft (Exhibit 3) and which Andon included in s its revised draft (Exhibit 10) unchanged. On January 12,

2004, Centrix advised that Andon' January 8, 2004 revised s draft was unacceptable. In an effort to advance the

settlement, Centrix submitted another draft agreement which incorporated some of Andon' suggestions made in Andon' s s revised draft (Exhibit 10) with which Centrix could agree, attached hereto as Exhibit 11. On January 14, 2004, Centrix received a further revised draft of the settlement agreement from Andon which is attached as Exhibit 12. On the same day, January 14,

2004, Centrix advised Andon of certain objections to Andon' proposed January 14th revised draft, Exhibit 12. s On January 15, 2004, Andon submitted to Centrix a further revised draft attached hereto as Exhibit 13, allegedly to obviate the objections Centrix noted with respect to Andon' January 14, 2004 draft (Exhibit 12). s On January 16, 2004, Centrix advised Andon that Andon' revised draft of the agreement of January 15, 2004 s (Exhibit 13) did not comport with the agreement reached with respect to the third " Whereas" clause, which Andon

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suggested be made a part of the agreement.

Also Andon, in

its January 15, 2004 draft (Exhibit 13) modified the form of the Stipulated Dismissal with prejudice which had previously been agreed to. In view of the material issues to which the parties agreed, Centrix submitted to Andon on January 16, 2004, a final draft agreement attached as Exhibit 14, which incorporated all the terms of the agreement upon which the parties agreed. Andon has refused to formalize the agreement reached. As indicated in Centrix' letter of January 16, 2004, s and attached draft agreement Exhibit 14, the parties have unequivocally agreed to the following: 1. Andon agrees to immediately cease and desist from

manufacturing, using, and/or selling the accused Andon' s " Cobra" brushes, an example of which is attached hereto as Exhibit A, and the accused Reliance styled brushes, an example of which is attached hereto as Exhibit B, which Centrix asserts infringes one or more of the claims of the ` 803 patent and ` 142 patent (paragraph 1 of Andon' January s 15, 2004 revised draft (Exhibit 13) is incorporated in its entirety as paragraph 1 of Centrix' final draft of January s 16, 2004 (Exhibit 14)).

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2.

Andon agrees that it will not make, have made, use

and/or sell any brush, either directly or indirectly, that will infringe said ` 803 patent and/or the ` 142 patent during the remaining term of said ` 803 and ` 142 patents, without the expressed written consent from Centrix, subsequent to the above noted effective date of this Settlement Agreement. (Paragraph 2 of Andon' January 15, s 2004 last draft (Exhibit 13) is incorporated in its entirety as paragraph 2 in Centrix' final draft of January s 16, 2004 (Exhibit 14)). 3. Andon warrants that its combined sales of the

accused Cobra styled brushes and the accused Reliance brushes between July 1, 2000 and the execution of this Settlement Agreement did not exceed $39,745.00. (paragraph 3 of Andon' January 15th last draft agreement (Exhibit 13) s is incorporated in its entirety as paragraph 3 in Centrix' s final draft agreement of January 16, 2004 (Exhibit 14)). 4. Andon agrees to pay Centrix the sum of One

Thousand ($1,000) Dollars upon the execution of this Agreement. (paragraph 4 of Andon' January 15, 2004 last s draft agreement (Exhibit 13) incorporated in its entirety as paragraph 4 in Centrix' final draft agreement of s January 16, 2004 (Exhibit 14)).

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5.

Andon further agrees that Andon and/or its

president, Robert Newell, did not conceive or invent any part of the structure and/or design disclosed and/or claimed in said ` 803 and ` 142 patents. (Paragraph 5 of

Andon' January 15, 2004 last draft (Exhibit 13) is s incorporated in its entirety as paragraph 5 of Centrix' s final draft of January 16, 2004 (Exhibit 14)). 6. The parties agree to execute and file a

Stipulation of Dismissal of the Lawsuit in the form attached hereto as Exhibit C. (Paragraph 6 of Andon' s

January 14, 2004 draft agreement (Exhibit 12) is incorporated in its entirety as paragraph 6 of Centrix' s final agreement of January 16, 2004 (Exhibit 14). (Note: In Andon' January 15, 2004 draft, Andon seeks to s

modify the wording of the Stipulated Dismissal with prejudice after Andon had previously agreed to the form Stipulated Dismissal in Andon' revised draft of January s 14, 2004 (Exhibit 12). Further, the Court can judicially

note that the Stipulated Dismissal to which the parties had agreed is a typical mutual form of a dismissal with prejudice.) 7. Andon agrees that during the remaining terms of

the ` 803 patent and the ` 142 patent, it will not accept any purchase orders for the Cobra brush as indicated in

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paragraph 1 and Exhibit A, that it will not accept any purchase orders for the Reliance brush as identified in paragraph 1 and Exhibit B, and that it will not accept any purchase orders for brushes that infringe the ` 803 patent and/or the ` 142 patent. (Paragraph 7 of Andon' last draft s of January 15, 2004 (Exhibit 13) has been adopted and incorporated in its entirety as paragraph 7 in Centrix' s final draft of January 16, 2004 (Exhibit 14). 8. Nothing in this agreement shall be construed to

preclude Centrix from reinstituting a patent infringement action in the event Andon makes and/or sells a brush that infringes any claims of the ` 803 and/or ` 142 patents subsequent to the effective date, written above, of this Settlement Agreement. Nothing in this settlement agreement

shall be construed to preclude Andon from asserting any legal and/or equitable defense to any such patent infringement action except those that are expressly relinquished herein. (This provision as noted in paragraph

9 of Andon' January 15th draft (Exhibit 13) has been s incorporated in substance and is recited in paragraph 8 of Centrix' final draft (Exhibit 14) insofar as the clause is s rendered consistent with the Stipulated Dismissal with prejudice to which Andon previously agreed in Andon' s proposed draft of January 14, 2004 (Exhibit 12)).

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9.

Paragraph 10 of Andon' January 15, 2004 last s

draft agreement (Exhibit 13) has been adopted and incorporated in its entirety as paragraph 9 of Centrix' s final draft agreement of January 16, 2004 (Exhibit 14). 10. Paragraphs 11, 12, 13, 14, 15 of Andon' January s

15, 2004 last draft agreement (Exhibit 13) have been adopted and are incorporated in their entirety as paragraphs 10, 11, 12, 13 and 14 respectively in Centrix' s final draft of January 16, 2004 (Exhibit 14). From the foregoing, it can be noted that all of the substantive issues have been agreed to by the parties, and that Andon' clauses, as written in Andon' last draft s s agreement (Exhibit 13) have been included virtually in their entirety in Centrix' final draft of January 16, 2004 s (Exhibit 14). Significantly, the respective parties have copied Judge Garfinkel through out the settlement discussions and exchanges of the draft agreements. Centrix submits that a

settlement in fact has been achieved as indicated herein. Andon' refusal to execute a written form of the settlement s reached cannot nullify the settlement reached.

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A R G U M E N T I. RELEVANT APPLICABLE LAW A finding that a settlement offer was made and accepted is a factual one. Rent-A-Wreck of America, Enterprise Rent-A-Car Co. v. ; 51 USPQ 2d

1213, 1214 (8 Cir 1999) citing Vaughn v. Sexton, 975 F.2d 498, 506 (8 Cir 1992). If the district court' account of the evidence is s plausible in light of the record viewed in its entirety, it may not be reversed on appeal; even though the appeal court would have weighed the evidence differently. Enterprise

Rent-A-Car, supra, citing Anderson v. Bessemer City, 470 US 564, 573-74 (1985). Credibility determinations are within the exclusive domain of the district court, and are virtually unreviewable on appeal. Enterprise Rent-A-Car, supra,

citing United States v. McCarthy, 97 F.3d 1562, 1579 (8th Cir). It has long been recognized that the courts have broad, inherent authority and equitable power to enforce an agreement in settlement of litigation before it. Bostick

Foundry v. Lindberg, 797 F.2d 280, 282-83 (6 Cir 1986). Moreover, a federal court possesses this power even if the agreement has not been reduced to writing. Brock v.

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Scheuner Corp., 841 F.2d 151, 154 (6 Cir 1998).

See also

Enterprise Rent-A-Car, supra, wherein an offer made by letter and orally accepted constituted an enforceable agreement. A settlement agreement is a contract. v. Implant Innovations, Inc., Core-Vent Corp. ; 34 USPQ

2d 1581, 1584 (Fed Cir 1995); S and T Mfg. Co. v. County of Hillsborough, 1997). It has been long established that courts favor dispute resolution through voluntary settlements and that settlement contracts will be upheld wherever possible because they are a means of amicably resolving doubts and uncertainties and preventing lawsuits. supra. To create a binding contract, it must be the result of an offer, an acceptance of that offer and a meeting of the minds between the contracting parties. Aquatic Renovation Systems, Inc., USPQ 2d 1097, 1082 (SD Ind. 1997) II. THE PARTIES SETTLEMENT DISCUSSION AT THE SETTLEMENT CONFERENCE OF DECEMBER 3, 2003 AND AS CONTINUED DISCUSSIONS AFTER THE SETTLEMENT CONFERENCE DID RESULT IN AN ENFORCEABLE SETTLEMENT AGREEMENT. Notare Corp. v. ; 46 S and T Mfg. Co., ; 2 USPQ 2d 1280, 1281 (Fed Cir

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As indicated herein, the parties hereto reached agreement at the settlement conference on two major issues, namely that Andon agreed to immediately cease the making and selling of the accused brushes, and that Andon would not infringe the patents in suit. Andon also agreed that

neither Andon nor its president, Mr. Newell, conceived or invented any part of the subject matter disclosed in the patents in suit. The only major issue not resolved at the

settlement conference was the monetary issue, which Centrix agreed to reduce from $15,000 to $1,000 for past infringement. However, on or about December 17, 2003, Andon did agree to the payment of the $1,000 for past infringements (Exhibit 2). On December 31, 2003, Centrix advised Judge

Garfinkel that the parties had effectively reached settlement upon the terms discussed at the settlement conference and Andon' agreement to effect, in addition s thereto, the payment of $1,000 for past infringements. As indicated herein, the parties then exchanged several proposed drafts which finally resulted in the final agreement attached as Exhibit 14 which virtually literally includes all of the terms as worded in Andon' proposed s draft attached as Exhibit 13.

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Centrix is at a loss to understand why Andon refuses to execute the final draft (Exhibit 14) which embodies all of the substantive terms upon which the parties agreed, which are phrased in language set forth in Andon' own s draft, attached as Exhibit 13. Paragraph 8 of Andon' last draft (Exhibit 13) was not s included in Centrix' final draft agreement (Exhibit 14) s because it is considered to be superfluous and selfserving, and imposes no obligation on either party. Also,

the form of the Stipulated Dismissal attached as Exhibit C to Andon' draft (Exhibit 13) appear to be ambiguous and s inconsistent inasmuch as the dismissal of Andon' s Counterclaims I, II, III and IV with prejudice and not the affirmative defenses is not logical, reasonable or consistent when it is noted the affirmative defenses are a mirror image of the counterclaims. Further, Andon had

previously agreed to the form of the Stipulation of Dismissal attached as Exhibit C to Centrix' final draft, s Exhibit 14. Reference is made to Exhibit C attached to

Andon' draft (Exhibit 12) and Exhibit A attached to s Andon' draft (Exhibit 10). s Not having objected to the

form of the Stipulated Dismissal with Prejudice and Andon having on at least two occasions agreed to the form of the Stipulated Dismissal with Prejudice as attached to the

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final agreement (Exhibit 14), cannot now seek to nullify the settlement reached by taking objection to the form of the Stipulated Dismissal with Prejudice, after an agreement in fact has been reached. And particularly not when there

is nothing onerous in the form of the Stipulated Dismissal with Prejudice attached to the final draft (Exhibit 14). In fact, it is quite standard in matters resolved by settlement for purposes of finality. Considering the record in its entirety and the applicable law, the parties have indeed reached an enforceable settlement agreement. Reference is made to

Enterprise Rent-A-Car Co., supra, wherein the Court found that Rent-A-Wreck' offer made in a letter dated April 20 s to the effect that Rent-A-Wreck offered to discontinue the use of an accused phrase and use in lieu thereof a different non-infringing trademark, and which Enterprise orally accepted in a telephone call, resulted in an enforceable settlement agreement. As noted by the Court in Core-Vent Corp. v. Implant Innovations, Inc., supra: " long as the core settlement is So accepted, we have a settlement. I do not expect the parties to try to negotiate new terms in words that may not have been expected by you."

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In Core-Vent, supra, the Court further noted that " Since contractual obligations are to be ascertained from objective manifestation of intent, [Andon' mental s] reservations are legally irrelevant." Citing David Massif Assoc. v. United States, 557 F.2d 249, 257 (Ct. Cl 1977).

D.

REQUEST FOR STAY OF DISCOVERY PENDING RESOLTUION OF ATTACHED MOTION TO ENFORCE THE SETTLEMENT AGREEMENT. Currently, the parties are proceeding with discovery

pursuant to the outstanding Parties Planning Meeting and Report filed on or about August 25, 2003. This stay is

requested so as to avoid the unnecessary expenditure of time, money and energy of the respective parties in undertaking continued discovery that will include the taking of depositions of several fact witnesses, preparing expert reports and the deposing of experts, and the filing of necessary motions relating to the unresolved discovery issues which will all be rendered moot if Centrix' motion s to enforce the Settlement Agreement reached is granted. makes good practical sense to stay any further discovery pending the Court' resolution of Centrix' Motion to s s Enforce the Settlement Agreement for all of the reasons stated herein. Further, neither party would be prejudiced It

by granting the stay, and the Court would be relieved of

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its burden of resolving any discovery dispute while Centrix' Motion to Enforce the Settlement Agreement is s pending. Reference is made to Rule 1 of Fed.R.Civ.P.,

which expresses that the rules that govern procedure in the Federal District Court shall be construed and administered to secure the just, speedy and inexpensive determination of every action. Almost immediately following the filing of this lawsuit, the parties have expended a considerable amount of time, money and energy in attempting to find an amiable resolution as noted by the extensive settlement discussions reiterated herein. In addition, Andon' requested numerous s

extensions of time for filing its Answer to the Complaint. Andon also requested extensions of time to respond to Centrix' written discovery requests. s As of this writing,

Andon has yet to respond to Centrix' Interrogatories and s Requests for Documents and Things that were served on Andon on November 7, 2003. Andon' request for delay at all s

times was predicated upon the reason that the parties were discussing settlement, which the parties have now reached, and which Andon now refuses to acknowledge. The Court is also urged to note that the pleadings are not yet closed, as there is currently pending before the Court Centrix' Rule 12 Motion to Dismiss certain of s

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Andon' Counterclaims and/or affirmative defenses. s

Andon' s

procrastinations and its refusal to now acknowledge the settlement reached is seriously prejudicing Centrix and has preempted Centrix' ability to effect discovery within the s time agreed to. Therefore, it is requested that the Court

stay discovery pending the resolution of this Motion and/or in the alternative, extend the dates of the current scheduling plan of August 25, 2003 by ninety (90) days. This is Centrix' first request for an extension relating s to discovery. C O N C L U S I O N In view of the facts, attached exhibits, the reasons stated herein and of the applicable law, it is requested that the Court grant Centrix' Motion to enforce the s settlement and to stay discovery pending the resolution of this motion. In the event the motion is not granted, it is

requested that the deadlines stated in the current Scheduling Plan filed on August 25, 2003, be extended ninety (90) days for the reasons stated. Respectfully submitted, ____________________________ Arthur T. Fattibene, CT06916 Counsel for Plaintiff Fattibene and Fattibene 2480 Post Road Southport, CT 06890
Tel 203-255-4400 Fax: 203-259-0033

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