United States District Court, M.D. Pennsylvania
Richard Caputo United States District Judge
before me is Plaintiffs' Motion to Interpret Powell
Defendants' Master Stipulation and Agreement of
Settlement. (See Doc. 1752, generally).
Specifically, Plaintiffs seek an order interpreting the terms
of the settlement agreement between Plaintiffs and Powell
Defendants,  including, inter alia, a
determination of the amount of time necessary for the Net
Worth Professional to complete his evaluation of Powell's
net worth. For the reasons that follow, the motion will be
motion is predicated upon the Master Stipulation and
Agreement of Settlement (“MSA”) entered into by
Plaintiffs and Powell Defendants on March 10, 2015,
(see Doc. 1676-1, generally), and approved
by the Court on December 21, 2015. (See Doc. 1716,
generally). Under the MSA, Powell Defendants were
required to make an initial payment totaling $4.75 million
into the designated Escrow Account and then, based upon
Powell's net worth, potentially a second payment not to
exceed $2.75 million. (See Doc. 1676-1, ¶¶
1(uu), 5(a)-(c)). This second payment is to be made only if
Powell's net worth is found to exceed $4.75 million as of
the Net Worth Determination Date. (See id. at ¶
6(c)). Within thirty (30) days after the Net Worth
Determination Date, Powell Defendants were required to notify
Plaintiffs of their estimation of Mr. Powell's net worth.
(See id. at ¶ 7). Within ten (10) business days
of receiving this figure, Plaintiffs were permitted to reject
this estimation, in which case the parties were required to
jointly engage the Net Worth Professional (the
“NWP”), identified in the MSA as Thomas Pratt,
CPA. (See id.; see also id. at ¶
1(z)). In this scenario, the NWP determines Powell's net
worth in accordance with the formula and process specified in
paragraph 9(a) of the MSA. (See id. at ¶ 9).
The MSA requires Powell Defendants to provide the NWP with
“all documentation that the [NWP] may reasonably
request for the purpose of determining Powell's net worth
as of the Net Worth Determination Date[.]”
(Id. ¶ 9(c)).
January 20, 2017, counsel for Powell Defendants provided
Plaintiffs with their estimation of Powell's net worth.
(See Doc. 1744, Ex. C). Plaintiffs rejected this
estimation that same day, triggering the retention of the NWP
to determine Powell's net worth. (See id. at Ex.
D). On February 7, 2017, the parties executed the NWP's
engagement agreement. (See id. at Ex. F).
February 17, 2017, the NWP sent Powell Defendants'
counsel the First Information Request. (See id. at
Ex. G). A week later, the NWP requested additional
information from Powell Defendants' counsel that he
deemed relevant to determining Powell's net worth.
(See id. at Ex. J). Thereafter, the NWP sent an
updated First Information Request on March 15, 2017. (See
id. at Ex. K). This request contained thirty-one (31)
itemized requests for documents and materials. (See
August 15, 2017, I denied without prejudice Plaintiffs'
motion to enforce settlement and for sanctions against Powell
Defendants. (See Docs. 1748-1749,
generally). Therein, I noted that Powell Defendants
represented that they would produce all documents requested
by the NWP before the end of May 2017. (See Doc.
1748, 5-6). Given the representation by counsel, I denied
without prejudice Plaintiffs' request that Powell
Defendants be directed to respond to the NWP's
information request. (See id.). I also denied
without prejudice Plaintiffs' motion for sanctions
because Plaintiffs failed to present any convincing grounds
supporting the imposition of sanctions for an approximate ten
(10) week delay in producing documents responsive to the
request by the NWP. (See id. at 6).
August 10, 2017, Plaintiffs requested from the NWP an update
of the status of his analysis. (See Doc. 1753, Ex.
D). The NWP in response noted that the parties “have
disagreed about the disclosure of our work between the
parties” and suggested that the dispute be resolved by
the parties. (See id.). In view of the NWP's
response, Plaintiffs' counsel contacted Powell
Defendants' counsel seeking an agreement allowing the NWP
to list the documents he was provided (without revealing the
contents of the documents), to identify by name only any
outstanding documents requested but not produced by Powell
Defendants (if any), and to provide a status update of his
analysis. (See id.). Counsel for Powell Defendants
responded to Plaintiffs that the terms of the MSA apply and
the NWP will perform his duties outlined therein and in the
retainer agreement. (See id.).
September 8, 2017, Plaintiffs' counsel again contacted
Powell Defendants' counsel about whether he would be
“willing to provide Plaintiffs with information
identifying what information and documentation has been
provided to Mr. Pratt, what additional information Mr. Pratt
has requested and when these requests were made. To be clear,
Plaintiffs are not seeking to see any of the materials that
were provided to Mr. Pratt.” (See id. at Ex.
F). Counsel for Powell Defendants responded by requesting
Plaintiffs' counsel to provide “citations to the
MSA or other authority supporting [the] request.”
(Id. at Ex. G).
September 13, 2017, Plaintiffs' counsel wrote to Powell
Defendants' counsel again regarding the information
produced to the NWP. (See id. at Ex. H). Powell
Defendants' counsel in response reiterated his position
that Powell was in compliance with the MSA and if he was not,
the NWP's report would reflect that fact. (See
id. at Ex. I).
on the foregoing, Plaintiffs filed the instant motion to
interpret the MSA on September 29, 2017. (See Doc.
1752, generally). Plaintiffs seek an order
interpreting the terms of the MSA, including whether Powell
Defendants have the ability under the agreement to prohibit
the NWP from providing an update on the status of his
evaluation. (See Doc. 1753, 1). Plaintiffs also
request an order to determine the amount of time necessary
for the NWP to complete his evaluation. (See id.).
Plaintiffs acknowledge that although the MSA is silent as to
when the NWP must issue his report on Powell's net worth,
the MSA provides that this Court retained jurisdiction to
interpret the terms of the agreement. (See id. at 2,
9). Thus, Plaintiffs argue that an order should be issued
interpreting the MSA to ensure the fair and orderly
administration of the settlement. (See id. at 13).
opposition, Powell Defendants argue that nothing in the MSA
permits the disclosure of the documents relied on by the NWP
in performing his analysis. (See Doc. 1754, 1).
Additionally, Powell Defendants emphasize that Paragraph 9(a)
of the MSA “contains no time limitations or deadlines
for the Net Worth Professional to complete this
analysis.” (Id. at 5 (emphasis omitted)).
Powell Defendants highlight that the MSA was a heavily
negotiated agreement involving numerous lawyers negotiating
the MSA's terms and conditions. (See id. at 9).
Nonetheless, Powell Defendants note that the MSA “does
not provide any date or deadline for the completion of the
Net Worth Report” and “[t]here is no such
need” “to add terms related to time lines or
deadlines for preparation of the Net Worth
Determination.” (Id.). Powell Defendants
therefore conclude that the motion to interpret the MSA
should be denied and to discourage such filings in the
future, Plaintiffs should be directed to reimburse Powell
Defendants for the costs and fees incurred in preparing the
response to the instant motion. (See id. at 11).
filed a timely reply brief, arguing that the Court should
determine whether Powell Defendants are in compliance with
the MSA and whether the NWP is permitted to provide a status
update regarding his analysis. (See Doc. 1755,
generally). Plaintiffs' motion to interpret the
MSA has now been fully briefed and is ripe for disposition.