Novak v. Farneman

John Novak owned a company, EnviroWave Energy, LLC (together, Novak) (plaintiffs) that developed a specified technology for which Novak sought a patent. At one point, Novak believed that Keith Welch and John Farneman (defendants), who were under nondisclosure agreements regarding the technology, had improperly used confidential information relating to the technology. Novak sued Welch and Farneman. The district court, Judge Marbley presiding, held a settlement conference, and Marbley acted as mediator. Edward Bacome, who was financially interested in Welch and Farneman’s company, attended the settlement conference. Bacome’s wife had been an associate at a law firm, Vorys, while Marbley had been a partner at Vorys, and Marbley had mentored Bacome’s wife. At the outset of the settlement conference, Marbley disclosed to the parties that he was acquainted with the Bacome family and the nature of his acquaintance. Marbley was confident that he could fairly mediate the matter, but he gave the parties the option to cease the mediation and proceed with a different mediator. The parties did not object to Marbley and elected to proceed with him. Through Marbley’s efforts, the parties reached a settlement at the conference, the material terms of which were placed on the record. Subsequently, the parties disputed the scope of certain terms and details. Welch and Farneman moved to enforce the recorded settlement agreement, and Novak moved to recuse Marbley. Novak argued that Marbley should not decide whether to enforce a settlement agreement that he had mediated and, additionally, that Marbley was partial to the Bacome family. According to Novak, Marbley had expressed “sympathy” for Bacome at having to pay for mistakes made by Welch and Farneman.