EMERGING EUROPE GROWTH FUND, L.P., and HORIZON CAPITAL GP LLC, a Delaware limited liability company, Plaintiffs,
IHOR FIGLUS, Defendant. IHOR FIGLUS, Plaintiff,
NATALIE A. JARESKO, and HORIZON CAPITAL GP LLC, a Delaware limited liability company, Defendants, and EMERGING EUROPE GROWTH FUND, L.P., Nominal Defendant.
Submitted: October 11, 2018
G. Harris and Sean A. Meluney, BERGER HARRIS LLP, Wilmington,
Delaware; Attorneys for Plaintiff.
Richard P. Rollo and Kevin M. Gallagher, RICHARDS, LAYTON
& FINGER P.A., Wilmington, Delaware; Attorneys for
Defendants and Nominal Defendant.
MONTGOMERY-REEVES, VICE CHANCELLOR.
before me are cross-motions to enforce a settlement
agreement. These parties are no strangers to litigation. The
two lead actors, an ex-husband and wife, began their first
legal battle with a divorce in 2011. Second, in 2012, the
limited partnership in which both are members sued the
ex-husband for leaking its confidential information. Third,
in 2017, the ex-husband sued his ex-wife and the limited
partnership for breach of contract and breach of fiduciary
duties. The parties appear to have come to their senses and
decided to settle, and they reached a settlement agreement on
December 11, 2017.
parties are now before me on cross-motions to enforce the
settlement agreement. There are very few factual disputes;
the parties generally agree about the applicable legal
standards; and the parties seek specific performance. They
dispute the scope of the "mutual general release"
that they agreed to as part of the December 11, 2017
settlement. In particular, I must decide whether the parties
intended to release their Ukrainian divorce proceedings,
including an ongoing case the ex-wife filed regarding unpaid
opinion, I hold that the parties did not intend to release
the Ukrainian divorce proceedings, and I grant the
ex-husband's motion and deny the ex-wife's motion.
parties agree that on December 11, 2017, they reached an
enforceable settlement agreement (the "Settlement
Agreement") resolving two pending cases between the
parties in Delaware. They dispute the meaning of the Settlement
Agreement, and the parties move to enforce the version they
argue the parties agreed to.
Figlus and his ex-wife Natalie Jaresko, who divorced in 2011,
are limited partners in Emerging Europe Growth Fund, L.P.
("Emerging"), a Delaware limited liability
partnership. Horizon Capital GP LLC ("Horizon
Capital") is Emerging's general
partner. I will refer to Jaresko, Emerging, and
Horizon Capital collectively as the "Horizon
October 10, 2012, Horizon Capital and Emerging filed a
lawsuit (C.A. No. 7936-VCMR) (the "First Delaware
Action") against Figlus, asking this Court to enjoin
Figlus from disclosing nonpublic information about Emerging
to the press in Ukraine, in violation of Emerging's
partnership agreement. This Court entered a temporary restraining
order and later a preliminary
injunction against Figlus.
15, 2017, Figlus filed this lawsuit (C.A. No. 2017-0373-TMR)
(the "Second Delaware Action") against Horizon
Capital and Jaresko for breach of fiduciary duty and breach
of contract. Thereafter, the parties began settlement
discussions, and by December they were close to an agreement.
December 6, 2017, Figlus's counsel made the following
offer to the Horizon Parties:
[W]e are authorized to counter your client's pending
offer with the following terms: (i) a total cash settlement
payment of $249, 000, to be delivered in one-lump
[sic] sum upon full execution and delivery of the
settlement agreement; (ii) the purchase of Mr. Figlus's
partnership interest; and (ii) [sic] a mutual,
general release, which would include, without limitation, any
claims/defenses that relate to or otherwise arise out of the
loans, notes, or security agreements between [Emerging]/the
Horizon entities and Ms. Jaresko and Mr.
December 7, the Horizon Parties' counsel sent
Figlus's counsel an email saying, "Thank you for the
call earlier today. As discussed, the client is willing to
pay $175k in exchange for (i) Mr. Figlus's partnership
interests and (ii) mutual general
releases." On December 8, Figlus's counsel
responded, "Mr. Figlus is willing to settle this matter
for $205, 000, along with the terms set forth in Jack's
email below, which is dated December 6th." On December
11, counsel for the Horizon Parties and counsel for Figlus
spoke by phone and discussed the terms of the settlement. No
counsel submitted an affidavit or any other admissible
evidence regarding the December 11 phone call. Thus, there is
no contemporaneous evidence before me that reflects the
contents of that phone call.
December 11, after the phone call, the Horizon Parties'
counsel sent Figlus's counsel an email saying, "I
have confirmed that $195k is acceptable, and will send a more
formal acceptance once I am in front of a
computer." The parties agree that they reached an
enforceable settlement agreement on December 11; the terms
included (1) payment of $195, 000 to Figlus, (2) purchase of
Figlus's limited partnership interests, and (3) mutual
December 21, 2017, the Horizon Parties sent Figlus a draft
settlement agreement (the "December 21 Draft")
reflecting what the Horizon Parties considered to be the
agreed-upon terms. The December 21 Draft purports to
release claims "that arise out of, relate to, or are
connected in any manner, directly or indirectly, with the
Delaware Actions, this Settlement Agreement or the underlying
events, actions, negotiations and other information arising
out of, relating to, or connected in any manner, directly or
indirectly, thereto." The December 21 Draft defines
the Delaware Actions as "Emerging Europe Growth
Fund, L.P. et al. v. Ihor Figlus, C.A. No. 7936-VCMR
(Del. Ch.) and Ihor Figlus v. Natalie Jaresko et
al., C.A. No. 2017-0373-TMR (Del.
December 26, Figlus's counsel responded with a revised
draft settlement agreement, which included changes he
characterized as "fairly minor." Figlus's
counsel added the following language to the end of Section
3(b) of the December 21 Draft: "This release shall not
apply to any liabilities, debts, alimony, property
distributions, and/or other liabilities pursuant to, or
arising out of, a past or future divorce
decree." The Horizon Parties objected on December
27, saying that Figlus's proposed carve out was not
contemplated in the December 11 Settlement
Agreement. The parties then exchanged emails about
who had agreed to what and when, the scope of the release,
and the inclusion of the carve out. Because of the dispute
over terms, the parties never executed the same version of
the settlement agreement.
October 11, 2018, Figlus filed a letter with this Court
stating that on July 12, 2018, Jaresko filed an individual
civil complaint in Ukraine (the "Ukrainian
Complaint") to collect alimony for the maintenance of
minor children based on a previous Ukrainian court judgment
(all divorce actions in Ukraine collectively, the
"Ukrainian Divorce Proceedings"). Figlus argues
that the Ukrainian Complaint represents "probative,
admissible evidence showing that Jaresko did not intend for
the settlement agreement at issue here, which was negotiated
and drafted last December, to release domestic-related claims
like the one asserted" in Ukraine.
Ukrainian Complaint states that the claim is based on an
action that was initiated on December 4, 2012, when Jaresko
filed papers attempting to recover alimony for the
maintenance of minor children from Figlus. On June 30,
2016, a Ukrainian state official terminated the action and
directed the parties to pursue the case in a different
manner. On May 18, 2017, the District Court of
Kyiv overturned the state official's termination and
required the state official to restart
proceedings.On September 18, 2017, the enforcement
hearings to update the alimony were reinstated. On January
10, 2018, the state official again terminated the case, this
time because Jaresko had not sent in the required
documents. Jaresko claims in the Ukrainian
Complaint that she did not receive notice of the September
18, 2017, and January 10, 2018 decisions. On June 25, 2018,
Jaresko submitted an application to the state official to
restore the action again. In the attached July 12, 2018
filing, Jaresko requests that the Ukrainian court reinstate
the case because of the notice failure.
parties do not dispute that they reached the Settlement
Agreement on December 11, 2017. They agree on all three terms
of the agreement. They agree on the need for specific
performance. They only disagree on the scope of the mutual
Horizon Parties argue that the parties agreed to a full
mutual general release that covers all of the disputes
between the parties, including the Ukrainian Divorce
Proceedings, because the release contains no carve outs.
Figlus argues that the parties agreed to enter into a mutual
general release of claims that "arise out of, relate to,
or are connected in any manner, directly or indirectly, with
the Delaware Actions." Figlus argues that there was no need for
a carve out because the parties never intended the release to
cover anything more than the Delaware Actions. Thus, I must determine the scope of the
"mutual general releases."
releases are a powerful tool under Delaware law.
[T]he concept of a general release [is] one which is intended
to cover everything-what the parties presently have in mind,
as well as what they do not have in mind, but what may,
nevertheless, arise. Such general releases are in common use,
and their potency, if it renders them too dangerous for
careless handling, is at the same time ...