The Delaware Court of Chancery recently resolved an issue about the scope of a release that was part of a settlement agreement. In Merging Europe Growth Fund, L.P. v. Figlus, C.A. No. 7936-VCMR (Del. Ch. Dec. 10, 2018), the court considered cross-motions to enforce a settlement agreement. One way to describe this case is “a dispute about whether there was a resolution of the dispute.”

Why This Case is Noteworthy: This decision deserves a place in the “virtual toolbox” of those engaged in corporate and commercial litigation because the court examines the parameters of a release when there is a dispute about whether or not certain claims or pending matters are covered.

Brief Background:

The parties in this case agreed to three basic terms of a settlement based only on the exchange of several emails—but no one formal document was executed by all the parties.

The key issue was which of the many lawsuits among the parties was covered by the mutual release provision of their settlement.

Key Takeaways:

  • The court recited the general legal principles applicable to releases and the typical scope of a release. See pages 9 and 10.
  • The court recited the familiar contract interpretation principle that when an agreement is ambiguous, extrinsic evidence is permitted to be considered as a means of determining the intent of the parties, such as, the history of negotiations, draft agreements, course of performance of the parties, and trade customs.
  • The court reasoned that if there was an intent to include in the release a lawsuit pending in the Ukraine in addition to the itemized Delaware lawsuits, that particular foreign litigation should have been expressly itemized as were the other pending cases.