United States District Court, M.D. Florida, Tampa Division
C. BUCKLEW United States District Judge.
cause comes before the Court on Plaintiffs' Emergency
Motion (Doc. No. 862), which Defendants oppose (Doc. No.
866). The Court, however, does not view the motion as an
“emergency.” As explained below, the motion is
granted in part and denied in part.
April 13, 2015, after several days of trial, the parties
entered into a settlement agreement wherein the Court agreed
to retain jurisdiction for two years. The settlement agreement
provided for a specific dispute resolution process/protocol
relating to disputes that might arise during those two years
relating to the settlement agreement. On July 15, 2015,
pursuant to the dispute resolution protocol, Plaintiffs sent
Defendants a letter notifying them of alleged breaches of the
settlement agreement. Unable to resolve the disputes, the
parties requested a mediation of their disputes with
Magistrate Judge Porcelli. When the mediation impassed, this
Court held an evidentiary hearing on November 21, December 6,
and December 15, 2016. Following the hearings, the Court
entered an order adjudicating the parties' disputes. In
the Order, the Court found, among other things, that
Plaintiffs' act of hiring the parties' escrow agent
(John Jorgensen) as their expert following the settlement of
the case created a conflict such that John Jorgensen could
not be forced to continue as the escrow agent, and Defendants
were unable to comply with their obligations under Section
7(b)(1) of the settlement agreement to turn over certain data
to the escrow agent because there was no escrow agent. The
Court gave the parties three options regarding the escrow
provision of the settlement agreement, and the parties have
now chosen Option 3, even though the Court stated in its
order that Option 3 did not seem practical because the
two-year term of escrow provided in the settlement agreement
would expire in three months. Option 3 provides the
Defendants can identify and select a new escrow agent that
meets with Plaintiffs' approval. The reasonable costs of
identification and selection of the escrow agent to be borne
by Plaintiffs, the party that created the problem.
Thereafter, the parties will both equally share the escrow
No. S-853). The Court also stated the following: “no
later than 7 days after an escrow agent has been selected and
an escrow agreement has been executed, Defendants must turn
over all materials that must be escrowed under the settlement
agreement.” (Doc. No. S-853). The parties agreed on a
new escrow agent but are not able to agree on the terms of an
escrow agreement, and the instant motion followed.
Plaintiffs' Emergency Motion
their emergency motion, Plaintiffs seek clarification of the
Court's January 10, 2017 order, as well as a 30-day
enlargement of the Court's retention of jurisdiction.
Accordingly, the Court will address both requests.
the evidentiary hearing, the parties originally selected
Matthew Decker as their escrow agent, but they could not
agree on the terms of the escrow agreement. As a result, the
parties selected a replacement escrow agent, but again, they
disagree as to the material terms of the escrow agreement as
it relates to the scope of what Defendants are obligated to
turn over and Plaintiffs' right to inspect the escrowed
materials. Specifically, the parties dispute whether all of
the materials required to be escrowed are necessarily
contained on the external hard drive and whether Plaintiffs
have the right to inspect the escrowed materials to ensure
that all of the required materials have been turned over.
appears that the major dispute revolves around whether
Plaintiffs have the right to inspect the escrowed materials.
Plaintiffs base this perceived right of inspection on the
original escrow agreement entered into by the parties and
Jorgensen during the course of the litigation, to which the
settlement agreement refers. Specifically, Section 7(b)(1) of
the settlement agreement states that the materials deposited
with the escrow agent are “subject to the terms,
conditions and provisions of the Escrow Agreement established
under the Action.” (Doc No. S-770).
parties agree that the “Escrow Agreement”
referred to in the settlement agreement is the parties'
Escrow Agreement with Jorgensen. (Doc. No. 862-1). However,
Defendants point out that Plaintiffs urged the Court during
the evidentiary hearing to conclude that the Jorgensen Escrow
Agreement had terminated. Therefore, Defendants contend that
they cannot be bound by the terms of the Jorgensen Escrow
Agreement. Defendants further argue that the Court implied
that the terms of the Jorgensen Escrow Agreement did not
survive when the Court directed the parties to agree to and
execute a new escrow agreement.
Court agrees with Defendants that with the exit of Jorgensen
as the escrow agent, the Jorgensen Escrow Agreement cannot be
enforced and that is why the Court contemplated that a new
escrow agreement would need to be executed. This Court will
not create an escrow agreement for the parties, although the
Court anticipated, apparently wrongly, the parties would
enter into an escrow agreement substantially similar to the
Jorgensen Escrow Agreement. The Jorgensen Escrow Agreement
did provide a protocol for the review of materials deposited
with the escrow agent. (Doc. 862-1, ¶ 4). Until an
escrow agreement is in place, Defendants will be relieved of
the obligation to escrow the required materials. Accordingly,
Plaintiffs' motion to clarify the Court's January 10,
2017 order is granted in part and denied in part.