United States District Court, E.D. Missouri, Eastern Division
MEMORANDUM AND ORDER
FLEISSIG UNITED STATES DISTRICT JUDGE.
matter is before the Court on Defendants' motion to
enforce settlement (ECF No. 24). For the reasons set forth
below, the motion will be granted in part and denied in part.
Biologix Franchise Marketing Corp. (“Biologix”)
is a manufacturer and franchisor of industrial cleaning
products. Defendant Kay Logic is a former franchisee owned by
Defendant Edward Kellman (together, “Kay”). The
parties appeared before the Court for an evidentiary hearing
on September 11, 2019, and presented testimony described
underlying case, filed in May 2018, Biologix sued Kay for
breach of contract alleging that, upon termination of the
parties' franchise agreement, Kay violated the
confidentiality and non-compete clauses by using
Biologix's proprietary information to operate a competing
business in prohibited territory. A month later, on June 14,
2018, the parties executed a confidential settlement
agreement pursuant to which Kay agreed to pay $324, 000,
payable in 27 monthly installments of $12, 000. The agreement
further provides that Kay may use a portion of each payment
as a credit toward the purchase of Biologix's products
and may sell the products without restriction and using
Biologix's trademark. Relevant provisions of the
settlement agreement are excerpted below.
1 captures the crux of the agreement as follows:
FMC [Biologix] acknowledges and understands that the primary
benefit to Kay Logic and Kellman under this Agreement is the
$8, 250 credit for supplies … and if such supplies
cannot be provided, the $12, 000 monthly payment shall cease
and no further payments shall be due to FMC (subject to the
below cure provision).
ECF No. 25-1, p. 1.
2 and 3 describe the unlimited scope of Kay's sales
rights and the nature and consequences of a default by either
There shall be no restrictions on the type and quantity of
product that may be ordered by Kay Logic under the credit
amount … There are no restrictions on how Kay Logic
uses or what Kay Logic does with the products it purchases
from FMC. If Kay Logic does not receive the products ordered
by the 15th day of the month following its order,
Kay Logic shall provide notice to FMC and FMC shall have 30
calendar days to cause the default to be cured and no further
payment shall be due unless and until such default is cured
with [sic] that 30-day period. If FMC does not cause the
default to be cured… the $12, 000 monthly payments
shall cease and no further payments shall be due FMC and this
Agreement shall immediately be terminated.
… if Kay Logic fails to make any monthly payment, FMC
will not be required to fill further orders until the failure
to pay has been cured. In addition FMC shall have the option
in its sole discretion the right [sic] to file the Consent
Judgment and fill in the blanks, provided that it first gives
notice and an opportunity to cure the payment default…
ECF No. 25-1, p. 1-2.
4 limits Kay's right to use Biologix's trademark
except with respect to Biologix products purchased pursuant
to the agreement:
During the term of this Agreement, the parties agree that Kay
Logic will do its own billing and will use its own
trademarks, trade names, service marks, logos, and commercial
symbols and will not use any trademarks, trade names, service
marks, logos, and commercial symbols of FMC. The parties
acknowledge, understand, and agree they are prohibited from
using any FMC trademark, trade name, service mark, logo, and
commercial symbol, except for the sale and use of
Biologix-branded products purchased under this Agreement.
ECF No. 25-1, p. 3.
21, titled Further Assurances, states:
The parties hereto agree to execute such other documents and
to take such other action as may be reasonably necessary to