Settlement Agreement

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7^th Circuit Court of Appeals

Case Name: Engineered Abrasives, Inc., v. American Machine Products & Services, Inc., et al.

Case No.: 17-1429

Officials: MANION AND KANNE, Circuit Judges, and MILLER, District Judge.

Focus: Settlement Agreement

The principals of American Machine Products are a father and son who left employment at Engineered Abrasives, Inc., to start a competing business in 2011. Bad blood seems to have marked the companies’ relationship ever since, to the apparent benefit of the lawyers who have represented them over years of bitter litigation. This case involves two lawsuits from that history.

In March 2015, Engineered Abrasives won a default judgment against American Machine and its principals for $714,814.04 and injunctive relief for stealing trade secrets and infringing trademarks. Five months later, Engineered Abrasives sued American Machine and its principals again. This time, with the help of the magistrate judge, the parties reached a settlement. American Machine’s insurer would pay $75,000 to Engineered Abrasives, and a permanent injunction would be entered against slander by American Machine or its principals with a $250,000 liquidated damages clause accompanying the injunction.

An interesting discussion could address why Engineered Abrasives would have released a $714,000 judgment for a payment of $75,000 and an injunction. Perhaps, as American Machine Products’ attorney suggested at oral argument, it was due to the long history of disputes and litigation between the parties. Or perhaps not. But without an ambiguity, the parties’ reasons are outside the scope of a court’s inquiry. We must enforce the release as the parties agreed. Accordingly, the judgment of the district court is AFFIRMED.

Affirmed

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Attorney Derek A. Hawkins is the managing partner at Hawkins Law Offices LLC, where he heads up the firm’s startup law practice. He specializes in business formation, corporate governance, intellectual property protection, private equity and venture capital funding and mergers & acquisitions. Check out the website at www.hawkins-lawoffices.com or contact them at 262-737-8825.