Facts

The plaintiff was initially recruited to work for defendant under the terms of a written employment contract. The plaintiff was never paid wages as promised, but was awarded additional stock as consideration for deferring his salary. After six months, the plaintiff refused additional deferrals and was terminated.

The case was presented in arbitration, and an interim award was issued in plaintiff's favor. Before the final award, plaintiff and defendant entered into a confidential settlement agreement.

PLAINTIFF'S CONTENTIONS:
The plaintiff contended the defendant defaulted on terms of the settlement agreement by failing to pay the final installment when due, thus entitling plaintiff to entry of judgment as specified in the settlement agreement.

DEFENDANT'S CONTENTIONS:
The defendant contended the plaintiff breached the confidentiality provisions of the agreement.

Settlement Discussions

The plaintiff demanded final payment due under settlement agreement. The defendant offered restricted stock in company that was trading below $0.05 per share.

Result

Judgment for plaintiff in the total amount of $1,095,800.

Other Information

The plaintiff originally filed for arbitration in 2005 pursuant to an agreement with defendant. The arbitrator issued an interim award in plaintiff's favor, and calendared a hearing for attorney fees and costs. Prior to the fee/cost hearing, plaintiff and defendant entered into a settlement agreement, which provided, inter alia, that plaintiff could seek entry of judgment in the amount of $1.2 million less any amounts paid by defendant in the event of defendant's default on the settlement agreement. The defendant ultimately defaulted, and plaintiff filed an action for declaratory relief in state court. Following plaintiff's filing in state court, the defendant removed the case to Federal Court based upon Diversity, and filed a counterclaim against plaintiff. During the pendency of discovery, defendant's counsel motion to withdraw was granted, and defendant was ordered to appear with new counsel within 60 days. The defendant failed to comply with the court's order. The plaintiff moved to strike defendant's responsive pleading and moved for entry of default judgment. Included in the judgment are attorney fee liens that defendant agreed to assume liability for, and attorney fees awarded pursuant to the settlement agreement.