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Jordan v. Mirra

United States District Court, D. Delaware

July 17, 2018

GIGI JORDAN, Plaintiff/Counterclaim-Defendant,
v.
RAYMOND A. MIRRA, JR., Defendant/Counterclaim-Plaintiff.

          MEMORANDUM

          Gerald Austin McHugh United States District Judge

         This is a counterclaim for breach of contract brought by Raymond Mirra. Having succeeded in winning dismissal of most of Plaintiff Gigi Jordan's claims against him because they were barred by a release, Mirra now seeks attorneys' incurred fees from having to defend against those claims, as well as claims in another action, on the grounds that the release also functions as a covenant not to sue giving rise to a separate cause of action for damages. Plaintiff Jordan moves to dismiss the counterclaims, arguing that the release does not qualify as a covenant not to sue that gives rise to a separate, cognizable claim, but rather may only serve as an affirmative defense. Upon close analysis of the controlling documents, I am persuaded that Ms. Jordan agreed to more than a simple release of claims, with the result that her motion to dismiss the counterclaims will be denied.

         I. Factual Background

         The parties entered into a number of agreements around March of 2008 in order to sever their years-long business partnership.[1] Among them were a Mutual General Release Agreement [hereinafter “Release”], and a Separation and Distribution Agreement (SDA). I am persuaded that the documents must be considered together, see Santomenno ex rel. John Hancock Tr. v. John Hancock Life Ins. Co. (U.S.A), 768 F.3d 284, 290-91 (3d Cir. 2014), because the Release details the parties' “desire to enter into, concurrently with this Release Agreement, [the SDA], ” and that the Release was made “in consideration of the [SDA]” in its introductory recitals. Conversely, the SDA makes reference to the Release by stating in Article 7, entitled “Mutual Releases, ” that the parties “agree to execute [a]waiver and release of rights agreement” with an exemplar attached.[2] This cross-referencing is sufficient to bring into play the rule established by E.I. du Pont de Nemours & Co. v. Shell Oil Co., 498 A.2d 1108, 1115 (Del. 1985): “Where two agreements are executed on the same day and are [sufficiently coordinated], in essence, they form one contract and must be examined as such.” The Release broadly releases claims by Jordan against Mirra:

Jordan, for and on behalf of (x) herself, her heirs and beneficiaries, (y) her affiliates and each of their limited and general partners, officers, directors, stockholders, members, managers, employees, attorneys, advisors and agents, and (z) each such foregoing person's or entity's predecessors, successors and assigns (collectively, the “Jordan Releasing Parties”), agrees to and hereby does irrevocably release and forever discharge (a) Raymond A. Mirra, Jr., (b) his heirs and beneficiaries, his affiliates and the officers, directors, stockholders, employees, agents, insurers and attorneys of each such affiliate, and (c) each such foregoing person's or entity's predecessors, successors and assigns (collectively the “Mirra Released Parties”) from any and all manner of actions, causes of action, claims, offsets, demands, judgments, complaints, executions, regulatory challenges, losses, damages, expenses, fees, debts, representations, warranties or liabilities of any kind whatsoever, whether arising out of state, federal or foreign law, rule, regulation or equity, whether known or unknown, accrued or not accrued, asserted or not asserted, matured or not matured, suspected or not suspected, fixed or contingent, foreseeable or unforeseeable, direct or indirect (each, a “Claim”, and collectively, “Claims”), which the Jordan Releasing Parties ever had, now have or hereafter can, shall or may have or acquire against the Mirra Released Parties, or any of them, by reason of any and all facts, circumstances, transactions, events, statements, representations, warranties, occurrences, acts, or omissions (whether or not knowingly, intentional, reckless or negligent; whether or not based on, due to or resulting from solely the conduct, action, activity, omission or fault of the Jordan Releasing Parties), which occurred, arose or existed at any time on or before the date of this Release Agreement.
The above Claims are referred to herein as the “Mirra Settled Claims”. Notwithstanding anything herein to the contrary, Jordan is not releasing hereby Mirra from Claims that arise under the express terms and conditions of, and specified in, the Distribution Agreement, the Indemnification Agreement and the Purchase Agreement.

Release ¶ 3, Raskopf Decl. Ex. B, ECF No. 234 (emphasis added).

         Paragraph 5 explicitly released claims not yet known: “Each of the Parties further expressly acknowledges that the releases set forth herein extend to Claims which are presently unknown, as well as known Claims.” Id. ¶ 5. The Release goes on to state in particularly striking language, that each party

“acknowledges hereby that he or she is aware that he or she may hereafter discover facts or circumstances in addition to or different from those which he or she now knows or believes to be true with respect to the subject matter of this Release Agreement, but that it is such Party's intention to, and such Parties hereby does, fully, finally, completely and forever release, discharge, compromise, settle, satisfy and extinguish any and all such Claims, without regard to the subsequent discovery or existence of such different or additional facts or circumstances.”

Id.

         In a separate paragraph, the following language appears:

Neither Mirra nor Jordan will assert any Claims against the other Party arising from or relating to Mirra's or Jordan's negotiation, execution and delivery of this Release Agreement . . . except with respect to Claims that arise under the express terms and conditions of, and specified in, this Release Agreement.

Id. ¶ 6 (emphasis added).

         Years after signing this document, Jordan brought this action in the Southern District of New York. It was later transferred here, to the District of Delaware, as a related case to another action Jordan brought in this court, in which she alleged civil RICO claims arising from the same transaction. In both, Jordan raised claims that were well within the broad scope of the Release, but argued that the Release was invalid due to fraud in its execution. In November, I adopted the entirety of Judge ...


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