Monday, April 03, 2006

Fourth Circuit issues opinion on settlement agreement

In Convey Compliance Systems v. 1099 Pro, the Fourth Circuit examines a settlement agreement in which the parties executed a general release of all claims between them, "known or unknown, arising out of any actions or events occurring in whole or part prior to or concurrent with the date" of the settlement. After the release 1099 Pro initiated a proceeding against Convey in the World Intellectual Property Organization to compel Convey to give up an Internet domain name that it had acquired before the settlement, Convey commenced an action for breach of the settlement agreement. 1099 Pro asserted that it was not aware of
the domain name dispute when entering into the settlement agreement and that therefore its claim against Convey was not within the scope of claims intended to be released in the settlement agreement.

The Fourth Circuit held that although 1099 Pro was able to show that it was not aware of any disputes relating to the domain name at the time of the settlement agreement, there was sufficient evidence from which the jury could have concluded that the parties nonetheless intended to foreclose future litigation arising from any action that occurred prior to
their settlements, whether known or unknown.

Hence, the Fourth Circuit affirmed the result that 1099 Pro had breached the agreement.

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