United States District Court, W.D. Virginia, Charlottesville Division
Glen E. Conrad Senior United States District Judge
case is presently before the court on the defendants'
motion to enforce settlement agreement and stay proceedings,
and the plaintiffs motion for sanctions. For the reasons set
forth below, the defendants' motion will be denied and
the plaintiffs motion will be denied without prejudice to
Innotec LLC ("Innotec") is a Colorado limited
liability company based in Lafayette, Colorado that
manufactures and supplies electrical and mechanical
components. Allen Ting, a Colorado resident, is the managing
member of Innotec.
Sales, Inc. ("Visiontech") is a Virginia
corporation based in Troy, Virginia that purchases electrical
and mechanical components. The founder, chief executive
officer, and owner of Visiontech is Richard Perrault, a
Florida resident. Perrault is also the owner of Visiontech
Sales Group Hong Kong, Ltd. ("VSG HK"), a related
entity based in Hong Kong.
February 1, 2017, Innotec filed the instant action against
Visiontech, VSG HK, and Perrault, seeking to obtain payment
for products ordered from Innotec. The complaint contains
five counts: (1) "Breach of Contract" by Visiontech
- "For the sale of goods pursuant to the Exclusivity
Agreement"; (2) "Breach of Contract" by
Visiontech - "Unpaid invoices for the sale of goods and
open purchase orders"; (3) "Unjust Enrichment"
against Visiontech; (4) "Breach of Contract by VSG
HK"; and (4) "Personal Liability against Owners of
[Visiontech] and VSG HK." Compl.fflf 30-44, Docket No.
March 16, 2017, the defendants answered Innotec's
complaint, and Visiontech filed a counterclaim against
Innotec and Ting. The counterclaim includes four counts: (1)
"Breach of Contract"; (2) "Actual Fraud";
(3) "Tortious Conversion of Molds and Tooling"; and
(4) "Tortious Interference with Contracts, Business
Relationships, and Prospective Economic Advantage."
Counterclaim fflf 24-45, Docket No. 10. The counterclaim is
the subject of a motion to dismiss that remains pending.
January 16, 2018, Innotec moved to compel proper and complete
discovery responses. That motion and other non-dispositive
pretrial matters were referred to United States Magistrate
Judge Joel C. Hoppe. By order entered February 12, 2018,
Judge Hoppe granted the motion to compel and directed the
defendants to respond to the discovery requests at issue no
later than February 22, 2018. See Feb. 12, 2018 Order, Docket
defendants did not comply with Judge Hoppe's order. They
maintain that compliance is no longer necessary because the
parties reached an oral settlement agreement on February 21,
2018, the day before their discovery responses were due. The
plaintiff, however, disagrees and contends that no
enforceable settlement agreement has been reached in the
case. On March 2, 2018, the defendants moved to enforce the
alleged oral settlement agreement and stay further
proceedings, including discovery, until the court rules on
the defendants' motion. That same day, the plaintiff
moved for sanctions, including involuntary dismissal of the
defendants' counterclaim, based on the defendants'
failure to comply with the discovery order. In response, the
defendants argue that sanctions are unwarranted because the
case has settled.
Facts Relevant to the Purported Settlement
this litigation, Innotec and Ting have been represented by
James Cosby and other attorneys with the law firm of
Vandeventer Black, LLP (collectively, "plaintiffs
counsel"). Visiontech, VSG HK; and Richard Perrault have
been represented by Michael Whitticar of NOVA IP Law, PLLC
September 15, 2017, plaintiffs counsel filed a proposed joint
discovery plan after receiving input from defense counsel.
The plan included a provision in which the parties
"agree[d] to request a settlement conference to be
administered by the Court upon a date mutually
agreeable." Discovery Plan¶13, Docket No. 33-2.
Judge Hoppe adopted the proposed discovery plan on October
settlement discussions were conducted through counsel. In the
fall of 2017, plaintiffs counsel submitted a settlement
demand to defense counsel. The record indicates that defense
counsel did not respond to the demand. See Ex. 1 to PL's
Resp. to Defs.' Mot. to Enforce Settlement Agreement,
Docket No. 108-1.
four months later, oh January 25, 2018, defense counsel
forwarded a settlement proposal to plaintiffs counsel. In
response, plaintiffs counsel noted that defense counsel's
clients had not responded to the plaintiffs previous demand.
Plaintiffs counsel emphasized that "[w]hen we receive an
offer or demand, we respond to it, with whatever view we have
at that time." Id. In reply, defense counsel
suggested that the attorneys "focus on resolving the
case rather than pointing fingers." Id.
is no evidence that counsel engaged in further settlement
discussions, requested a court-administered settlement
conference, or sought referral to an alternative dispute,
resolution resource outside the court as permitted by the
local rules. See W.D. Va. Civ. R. 83. Instead,
Andrew Flint, a non-attorney "debt negotiator" who
was "hired" by the defendants to "assist in
the negotiation and settlement of this litigation, "
attempted to negotiate directly with Ting. Flint Decl.t 2,
Docket No. 97-7.
February 21, 2018, Flint contacted Ting by telephone on
multiple occasions. The defendants now maintain that, during
those telephone conversions, the parties reached an oral
settlement agreement. According ...