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Zinner v. Olenych

United States District Court, E.D. Virginia, Norfolk Division

December 24, 2015

EDWARD M. ZINNER, Plaintiff,
v.
RICHARD P. OLENYCH, and LONE TREE PRINTING, INC. Defendants.

MAGISTRATE JUDGE'S REPORT AND RECOMMENDATION

DOUGLAS E. MILLER, Magistrate Judge.

After the parties reached a negotiated settlement of the federal claims raised in this matter, the case was dismissed with prejudice with the court retaining jurisdiction solely to enforce the parties' Settlement Agreement. Thereafter, the Defendants, Richard P. Olenych ("Olenych") and Lone Tree Printing, Inc. ("Lone Tree"), moved the court to enforce the Settlement Agreement, arguing that Plaintiff Edward M. Zinner ("Zinner") was attempting to re-litigate the settled matters in a new action filed in the Virginia Beach Circuit Court. Zinner opposed the Defendants' motion and the matter was referred to the undersigned United States Magistrate Judge for a recommended disposition under 28 U.S.C. § 636(b)(3). (ECF No. 95).

Because the state court action does not involve claims under the federal statute at issue in this case, the Defendants have not made any showing that Plaintiff is in breach, much less any made any showing that Plaintiff is in breach, much less any showing which would be required for the extraordinary injunctive relief requested. Accordingly, for the reasons set out in detail below, this report recommends that the court deny the Defendants' motion (ECF No. 82).

I. FACTUAL AND PROCEDURAL HISTORY

Zinner, a musician and businessman, brought this Lanham Act claim against the Defendants seeking damages as a result of their use of the domain name edzinner.com.[1] Specifically, the federal claims asserted that Olenych and Lone Tree violated the Anti-Cybersquatting Consumer Protection Act amendments to the Lanham Act. Count I asserted that Defendants violated 15 U.S.C. § 8131 by registering the domain name edzinner.com without Zinner's consent. Zinner also alleged that the Defendants had the specific intent to profit from the registration by selling the domain name to Zinner. (Compl., ECF No. 1, ¶¶ 41-43). Count II asserted a claim under 15 U.S.C. § 1125(d) for bad faith registration of the domain name edzinner.com, alleged to be identical to the Ed Zinner mark which Plaintiff Zinner had registered with the patent and trademark office. (Summary Judgment Opposition, ECF No. 54, at 9, n.2).

Following contentious litigation, including a Motion for Summary Judgment and several contested discovery proceedings, the parties represented to the court that they had reached a settlement agreement with the assistance of United States Magistrate Judge Tommy Miller. The court removed the case from the trial docket pending submission of an agreed dismissal order. Thereafter, negotiations apparently broke down regarding certain terms of the Settlement Agreement and Plaintiff Zinner originally filed a motion to enforce the agreement on August 5, 2015. (ECF Nos. 71, 72). Zinner's motion alleged that the parties reached an oral agreement at the settlement conference, but that Defendants Olenych and Lone Tree were refusing to sign a written agreement memorializing the terms. Defendants opposed that motion, arguing that the document presented contained additional terms that had not been agreed to. Specifically, Defendants objected to the document's language which purported to authorize a permanent injunction barring Defendants from creating other websites concerning Edward Zinner or his family members. Calling it an infringement of Olenych's First Amendment rights, the Defendants stated that no injunction had been agreed to as part of the settlement. (ECF No. 73, at 4). The Defendants also opposed the broad confidentiality language in the proposed agreement, and argued that the agreement needed to contain specific release language. The Defendants proposed modifying the confidentiality provisions and adding a release "from any and all causes of action, of any type or causes, solely arising out of or under the Lanham Act, including specifically the Anti-Cybersquatting Consumer Protection Act... and any other claims brought in the Federal Court Action." (Wong Cert., Ex. A, ECF No. 77-2, at 3-4).

After briefing, the parties appeared before the District Judge. (ECF No. 81). During the hearing, the parties advised the court that they intended to renew their efforts to settle the case and immediately thereafter the parties and their counsel reconvened with the undersigned for a supplemental settlement conference. At the conclusion of that conference, the parties signed a written Settlement Agreement which has now been made part of the record as a sealed exhibit to these proceedings. (ECF No. 94).

As relevant here, the language of the executed Settlement Agreement, which was negotiated and edited during the supplemental conference, provides for no injunction, and contains only a prohibition that Defendants Olenych and Lone Tree would not use the domain name "edzinner.com, " or create any other websites concerning Edward Zinner, his family members and/or his businesses. In addition, the agreement required that the Defendants turn over the "edzinner.com" domain name to Zinner, refrain from registering any new similar domain names, and make a settlement payment to Zinner. (Confidential Settlement Agreement & Release, ECF No. 94, at 1-2). The agreement specifically describes this pending matter, Civil Action No. 2:14cv163, as the "Federal Court Action" and used that defined term throughout. The executed agreement did not adopt the release language requested by Defendants, but in exchange for the obligations and payment agreed to by Olenych and Lone Tree, Zinner agreed to "voluntarily dismiss with prejudice" the Federal Court Action, by filing with the court a Stipulation of Dismissal, which had been attached as Exhibit A. The executed agreement also contained the following provision:

The parties acknowledge and understand that all information which was produced or identified during the Federal Court Action may be used by the parties in future proceedings, however, the parties do not waive any right to assert objections to their use, including any challenges to their admissibility or production, under the applicable Rules of Evidence and subject to any rulings by the court or other tribunal.

(ECF No. 94, at 2-3).

Finally, the agreement recites that it was entered into in order to compromise and "resolve fully any and all matters between Zinner and Olenych and Lone Tree Printing, Inc., and only concerns claims asserted in the Federal Court Action." (ECF No. 94, at 1).

The parties executed the Stipulation of Dismissal during the settlement conference and it was entered the same day. Following the dismissal, Zinner and other parties filed a new action in the Virginia Beach Circuit Court against Olenych, Lone Tree and six other defendants. See Ocean Equity Payment Solutions, LLC, et al. v. Olenych, et al., Case No. CL15004019 (ECF No. 83-2) (the "Virginia Beach Action"). The Virginia Beach Action is set forth in an 81-page Complaint alleging thirteen separate causes of action. It was accompanied by more than 1, 800 pages of "Exhibits, " all of which have been filed in this court in support of Defendants' Motion to Enforce the Settlement. (ECF Nos. 83-2 - 83-20). Among the claims asserted in the Virginia Beach Action are the panoply of fiduciary and business tort claims which frequently accompany particularly contentious corporate litigation. Specifically, Zinner and the other plaintiffs assert claims for breach of fiduciary duty, tortious interference, statutory and common law conspiracy, negligent and intentional infliction of emotional distress, breach of contract, defamation and conversion. In addition, the new state case asserts a claim of "Unauthorized Use of Name" under Virginia Code § 8.01-40 and a violation of Virginia's Computer Crimes Act. (ECF No. 83-2).

Asserting broadly that the Virginia Beach Action attempts to re-litigate "nearly identical claims" to those which had been dismissed with prejudice in this court, the Defendants filed a motion (ECF No. 82) to enforce the Settlement Agreement seeking an order enjoining Zinner and "all those in active concert with him" from pursuing his claims against the Defendants in the Virginia Beach Action, or from seeking the same or similar relief against the Defendants in any other forum. (Reply in Supp. of Mot. to Enforce Settlement, ECF No. 88, at 2, 5). The motion does not specify which counts or claims in the Virginia Beach Action should be barred, nor does it address Zinner's claims against the six new defendants, or the new plaintiffs' claims against Olenych and Lone Tree. Instead, it argues that all of the claims are "intertwined and inseparable." See (ECF No. 82). Accordingly, Defendants seek an order "permanently enjoining Zinner and all those in active concert with him from pursuing his claim against Defendants in" the Virginia Beach Action or any other forum. (ECF No. 83, at 8).

After reviewing the Settlement Agreement and the allegations contained in the Virginia Beach Action, the undersigned does not find any basis for relief in this court. Accordingly, ...


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