Title: City of Newark v. Durkin, et al.

State: delaware

Issuer: Delaware Supreme Court

Document:

IN THE SUPREME COURT OF THE STATE OF DELAWARE 
 
 
CITY OF NEWARK, 
 
 
§ 
 
 
 
 
 
 
 
§ 
No.  29, 2023D 
      
Plaintiff Below, 
 
 
§ 
 
      
Appellant,  
 
 
§ 
Court Below:  Superior Court  
 
 
 
 
 
 
§  
of the State of Delaware 
v. 
 
 
 
 
§ 
§  
C.A. No.  N21C-12-039 
DONALD M. DURKIN  
 
§ 
CONTRACTING, INC.,                      § 
DONALD M. DURKIN, JR., 
 
§  
JAMES DURKIN, and  
 
§ 
MICHAEL DURKIN, 
 
 
§ 
 
§ 
 
 
   
      
Defendants Below,  
          § 
 
 
   
 
      
Appellees.  
 
 
§  
 
 
 
Submitted:  July 26, 2023 
Decided:     August 28, 2023 
 
 
Before VALIHURA, TRAYNOR, and LEGROW, Justices. 
 
Upon appeal from the Superior Court of the State of Delaware: REVERSED. 
 
Max B. Walton, Esquire, Shaun Michael Kelly, Esquire, Erica K. Sefton, Esquire, 
CONNOLLY GALLAGHER LLP, Newark, Delaware, for Appellant City of 
Newark. 
 
Paul A. Logan, Esquire, POST & SCHELL, P.C., Wilmington, Delaware, for 
Appellees Donald M. Durkin Contracting, Inc., Donald M. Durkin, Jr., James 
Durkin, and Michael Durkin.  
 
 
LEGROW, Justice:
 
The appellant seeks review of a Superior Court Order1 resolving the appellees’ 
contractual indemnification obligations. The appellant sought a declaration from the 
Superior Court that the appellees breached a settlement agreement between the 
parties and, under the terms of that settlement agreement, the appellees must 
indemnify the appellant for all its fees and costs associated with a 2019 subpoena 
and a separate declaratory judgment action the appellees filed in 2019.  The Superior 
Court held that the appellees must indemnify the appellant for the subpoena, but not 
the 2019 action.  
On appeal, the appellant contends the settlement agreement’s plain language 
obligates the appellees to indemnify the appellant for the 2019 action, and the 
Superior Court erred in concluding otherwise. The indemnification provision at issue 
broadly required the appellees to indemnify the appellant for any fees and costs it 
incurred in any proceeding related to the appellees’ separate litigation against a third 
party in Pennsylvania. The appellees filed the 2019 action to clarify the appellant’s 
obligation to cooperate with, and provide discovery in, that Pennsylvania litigation.  
In its summary judgment decision, the Superior Court denied the appellant’s 
indemnification claim without expressly addressing whether the 2019 action was 
“related to” the Pennsylvania litigation.  Because the appellant is entitled to 
 
1 City of Newark v. Donald M. Durkin Contracting, Inc., 2023 WL 128258 (Del. Super. Jan. 6, 
2023) [hereinafter “Durkin III”]. 
 
2 
 
indemnification under the plain terms of the parties’ agreement, we reverse the 
Superior Court’s decision. 
I. 
RELEVANT FACTS AND PROCEDURAL BACKGROUND 
A. 
The Federal Litigation 
On March 16, 2004, Donald Durkin Contracting, Inc., Donald M. Durkin, Jr., 
James Durkin, and Michael Durkin (collectively, “Durkin”) brought an action 
against the City of Newark (the “City”) in the United States District Court for the 
District of Delaware for wrongful termination of a contract to erect a reservoir and 
for violation of Durkin’s civil rights (the “Federal Litigation”).2  Tighe Cottrell & 
Logan (“Cottrell”) initially represented the City in the Federal Litigation.3  In 2006, 
a jury awarded Durkin approximately $25 million in damages.4  Both parties 
appealed to the United States Court of Appeals for the Third Circuit and 
simultaneously pursued mediation.5  
B. 
The Settlement Agreement 
On June 23, 2008, while the Third Circuit appeal was pending, Durkin and 
the City entered into a fully integrated settlement agreement (the “Settlement 
 
2 App. to Opening Br. at A12. 
3 Id. 
4 Id.; Donald M. Durkin Contracting, Inc. v. City of Newark, 2020 WL 2991778, at *2-3 (Del. 
Super. June 4, 2020) [hereinafter “Durkin I”]. 
5 App. to Opening Br. at A12-13. 
 
3 
 
Agreement”).6  In Paragraph 5 of the Settlement Agreement, Durkin released the 
City from claims for anything transpiring before the settlement: 
For and in consideration of the payment set forth in Section 2 above, 
Durkin and Federal agree on behalf of themselves and . . . their 
respective . . . employees, agents, principals, owners, directors, 
officers, . . . to fully, finally and completely release and discharge . . . 
the [City], from any and all claims, demands, damages, costs, expenses, 
liability, actions, causes of actions, or claims of liability or 
responsibility of any kind whatsoever (including attorneys’ fees and 
costs) which the Durkin and Federal Parties now have or may hereafter 
have on account of, or arising out of any matter or thing which has 
happened, developed or occurred prior to the signing of this Agreement, 
specifically including but not limited to, any and all claims on account 
of, arising out of or in any way related to the matters that were or could 
have been asserted in the Lawsuit, that arise from or are related to the 
facts or matters at issue in the Lawsuit . . . .7  
Although Durkin generally released the City from all claims arising out of any 
matters at issue in the Federal Litigation, Durkin expressly retained any claims it 
might have against Cottrell and clarified that the release did not extend to the City’s 
obligations under the Settlement Agreement: 
provided, however, that the Durkin and Federal Parties do not 
release the [City] from their obligations under this Agreement, and 
do not release any claims that they have or may have against Paul 
Cottrell, Tighe & Cottrell P.A. and individuals associated with Tighe & 
Cottrell P.A. (collectively the “Cottrell Firm”).8 
 
By the time the parties executed the Settlement Agreement, Durkin had 
initiated litigation against Cottrell.  Durkin expressly agreed to indemnify the City 
 
6 Id. 
7 Id. at A26-27. 
8 Id. at A27 (emphasis added). 
 
4 
 
for any fees and costs the City incurred in any claim made against the City in the 
action against Cottrell or in any proceeding related to that action.9  Specifically, 
Paragraph 7 to the Settlement Agreement stated: 
If . . . the [City] become[s] a party to the Litigation, or [is a] party to 
any separate litigation or proceedings related in any way to the 
Litigation, then Durkin . . . hereby fully release[s] and discharge[s] the 
[City] from any claims or damages in the Litigation or any separate 
litigation or proceedings related to the Litigation. . . . If a claim of any 
nature and by any party . . . is brought against the [City] in the 
Litigation, or in separate litigation or proceedings related to the  
Litigation, [Durkin] agree[s] to: (1) pay all attorneys’ fees, expert 
fees, and costs incurred by the [City] in defense of the Litigation, or 
separate litigation or proceedings related to the Litigation; and (2) 
indemnify, defend, and hold the [City] harmless from all actions, 
causes of action, claims, demands, cost, liabilities, expenses and 
damages (including attorneys’ fees) arising out of, or in connection 
with any claim in the Litigation or any separate litigation or 
proceedings related to the Litigation.10 
 
The Settlement Agreement and associated mutual releases concluded the 
Federal Litigation.11 
C. 
The Pennsylvania Litigation 
On May 14, 2008, Durkin filed a separate action against Cottrell in the 
Pennsylvania Court of Common Pleas (the “Pennsylvania Litigation”) asserting 
claims of abuse of process, malicious prosecution, and intentional interference with 
contractual relations.12  In that action, Durkin alleged Cottrell advised the City to 
 
9 Id. at A28. The Settlement Agreement refers to that action as the “Litigation.” 
10 Id. at A15, A28-30 (emphasis added). 
11 Durkin I, 2020 WL 2991778, at *3.  
12 App. to Opening Br. at A12. 
 
5 
 
pursue frivolous and baseless counterclaims against Durkin and third-party claims 
against Durkin’s surety, Federal Insurance Company, based on allegations Cottrell 
knew were false.13  The Pennsylvania Litigation is what the parties referred to as the 
“Litigation” in the Settlement Agreement. 
Beginning in July 2012, Durkin sought discovery from Cottrell in the 
Pennsylvania Litigation, and Cottrell invoked the attorney-client privilege for 
discovery relating to Cottrell’s representation of the City in the Federal Litigation.14  
In October 2013, Durkin asked the City to waive privilege for communications 
between Cottrell and the City.15  The City refused,16 and on January 9, 2014, and 
November 23, 2016, Durkin served the City with two subpoenas seeking documents 
for Durkin’s use in the Pennsylvania Litigation.17  Durkin voluntarily withdrew those 
subpoenas after the City moved to quash them.18  On January 15, 2019, Durkin 
served its third and final subpoena demanding that the City produce in the 
Pennsylvania Litigation communications between the City and Cottrell (the “2019 
 
13 Answering Br. at 6. 
14 App. to Opening Br. at A15. 
15 Id. 
16 Id. 
17 App. to Opening Br. at A16. 
18 Id. 
 
6 
 
Subpoena”).19  Once again, the City moved to quash the 2019 Subpoena, and Durkin 
withdrew it.20 
D. 
Durkin’s 2019 Declaratory Judgment Action 
After withdrawing the 2019 Subpoena, Durkin filed a complaint in the 
Superior Court for declaratory and other relief (the “2019 Declaratory Judgment 
Action”).21  Durkin sought, inter alia,  
[j]udgment in its favor against the City of Newark declaring that 
pursuant to the City’s obligation to cooperate in the Settlement 
Agreement, the City shall produce, without objection or cost to 
Durkin, all requested documents and provide designees for deposition 
and at trial in connection with Durkin’s [Pennsylvania Litigation] 
against [Cottrell].22   
 
Durkin’s theory that the City had a duty to cooperate in the Litigation was based on 
Paragraph 18 of the Settlement Agreement, titled, “Continuing Cooperation.”23  
Paragraph 18 states, “[t]he Parties agree to cooperate with each other and take such 
additional actions as necessary to effectuate the purposes of this Agreement.”24 
The City filed a motion to dismiss and a motion for indemnification, sanctions, 
and other relief.  On June 4, 2020, the Superior Court dismissed Durkin’s 2019 
Declaratory Judgment Action as untimely because the claim was filed six years after 
 
19 Id. 
20 Id. at A17. 
21 Id. at A49-62. 
22 Id. at A61-62. 
23 Id. at A61. 
24 Id. at A33. 
 
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the City’s alleged breach of Paragraph 18.25  Durkin moved for reargument, but the 
Superior Court denied that motion, holding that the terms of the Settlement 
Agreement were unambiguous and observing that nothing in the Settlement 
Agreement suggested that the City had an obligation to cooperate in the 
Pennsylvania Litigation.26 
E. 
The City’s Indemnification Requests and Declaratory Judgment 
Action 
A few months later, on November 10, 2020, the Superior Court denied the 
City’s motion for indemnification, sanctions, and other relief, concluding that the 
City’s indemnification claim was not ripe because the City had not yet followed the 
Settlement Agreement’s procedure for seeking indemnification.27 The City then 
formally demanded that Durkin indemnify the City for the attorneys’ fees and costs 
it incurred defending Durkin’s 2019 Declaratory Judgment Action and 2019 
Subpoena.28 Durkin refused to indemnify the City for either proceeding,29 and on 
December 6, 2021, the City filed the current action seeking indemnification and 
damages.30  
 
25 Id. at A17; Durkin I, 2020 WL 2991778, at *7-10. 
26 App. to Opening Br. at A17-18; Answering Br. at 8; Donald M. Durkin Contracting, Inc. v. City 
of Newark, 2020 WL 5797622, at *10-11 (Del. Super. Sept. 29, 2020) [hereinafter “Durkin II]. 
27 Donald M. Durkin Contracting, Inc. v. City of Newark, 2020 WL 6588903, at *7 (Del. Super. 
Nov. 10, 2020). 
28App. to Opening Br. at A39-41. 
29 Id. at A65-66. 
30 Id. at A9-23. 
 
8 
 
The City’s complaint alleged Durkin (i) breached Paragraph 5 of the 
Settlement Agreement by pursuing the 2019 Subpoena and the 2019 Declaratory 
Judgment Action, and (ii) breached Paragraph 7 of the Settlement Agreement by 
refusing to indemnify the City for its fees and expenses incurred in each of those 
proceedings.31 The parties promptly cross-moved for summary judgment.32  
On January 6, 2023, the Superior Court issued its Memorandum Opinion and 
Order granting in part and denying in part each side’s motion for summary judgment.  
The trial court granted the City’s motion for summary judgment with respect to its 
indemnification claim for the 2019 Subpoena but denied the City’s motion with 
respect to its indemnification claim for the 2019 Declaratory Judgment Action.33  
The Superior Court held that Durkin’s 2019 Declaratory Judgment Action did not 
breach Paragraph 5 of the Settlement Agreement because Durkin filed that action to 
clarify the scope of the Settlement Agreement’s Continuing Cooperation provision.34  
The Superior Court reasoned that Paragraph 5 of the Settlement Agreement did not 
release, and in fact expressly preserved, the City’s obligations under the Settlement 
Agreement, so Durkin’s action to enforce the Settlement Agreement did not 
contravene the release.35   
 
31 Id. at A19-22. 
32 Id. at A42-48; A67-73. While the cross-motions were pending, the assigned judge retired and a 
new judge was assigned to the case. 
33 Durkin III, 2023 WL 128258, at *7. 
34 Id. at *5-6. 
35 Id. at *6.  
 
9 
 
The Superior Court further held that the City was not entitled to 
indemnification for the 2019 Declaratory Judgment Action.36  The Superior Court 
did not, however, analyze the scope of the indemnification provision or its 
application to the 2019 Declaratory Judgment Action.  The trial court separately held 
that the City was entitled to indemnification for the 2019 Subpoena because it was a 
“claim” as that term was used in the Settlement Agreement, and the attorneys’ fees 
and costs the City incurred in moving to quash the 2019 Subpoena were incurred in 
a proceeding related to the Pennsylvania Litigation.37  On January 27, 2023, the City 
filed its notice of appeal challenging only the Superior Court’s holding that the City 
was not entitled to indemnification for Durkin’s 2019 Declaratory Judgment 
Action.38  
II. 
STANDARD OF REVIEW 
A trial court’s decision resolving a motion for summary judgment is reviewed 
de novo, applying the same standard as the trial court.39  Similarly, questions of 
contractual interpretation are subject to de novo review.40 
 
36 Id.  
37 Id. 
38 Opening Br. at 2.  
39 AeroGlobal Cap. Mgmt., LLC v. Cirrus Indus., Inc., 871 A.2d 428, 443 (Del. 2005); Paul v. 
Deloitte & Touche, LLP, 974 A.2d 140, 145 (Del. 2009). 
40 CompoSecure, L.L.C. v. CardUX, LLC, 206 A.3d 807, 816 (Del. 2018). 
 
10 
 
III. 
ANALYSIS 
The City argued to the Superior Court that the 2019 Declaratory Judgment 
Action sought a specific declaration that the City was obligated to assist Durkin with 
its discovery and trial efforts in the Pennsylvania Litigation, the actions therefore 
were related, and the City was entitled to indemnification under the Settlement 
Agreement.  The City raises similar arguments on appeal.  First, the City contends 
that the plain language of Paragraph 7 requires indemnification because the actions 
are related. Second, it asserts that the Superior Court’s other rulings support the 
City’s position regarding relatedness.  Third, it argues the parties’ intent is consistent 
with the City’s indemnification claim.41 
A. 
The Settlement Agreement’s plain language requires Durkin to 
indemnify the City for the 2019 Declaratory Judgment Action. 
The City first contends Durkin’s 2019 Declaratory Judgment Action was 
related to the Pennsylvania Litigation because it specifically referred to and sought 
relief compelling the City to assist with Durkin’s discovery efforts in the 
Pennsylvania Litigation.42  According to this argument, the two actions are “related,” 
and Paragraph 7 requires Durkin to indemnify the City.43  
 
41 Because neither side contends Paragraph 7 is ambiguous, we have not relied on the City’s 
argument regarding the extrinsic evidence of the parties’ intent. 
42 Opening Br. at 14. 
43 Id. 
 
11 
 
Delaware follows the objective theory of contracts, meaning “a contract’s 
construction should be that which would be understood by an objective, reasonable 
third party.”44  Further, the Court will interpret clear and unambiguous terms 
according to their ordinary meaning45 and will not “torture contractual terms to create 
ambiguity.”46 
The terms of the Settlement Agreement are unambiguous. The relevant 
section of Paragraph 7 of the Settlement Agreement states: 
If a claim of any nature and by any party, including but not limited 
to a claim for indemnification or contribution, is brought against the 
[City] in the Litigation, or in separate litigation or proceedings 
related to the Litigation, [Durkin] agree[s] to: (1) pay all attorneys’ 
fees, expert fees, and costs incurred  by the [City] in defense of the 
Litigation, or separate litigation or proceedings related to the Litigation; 
and (2) indemnify, defend, and hold the [City] harmless from all 
actions, causes of action, claims, demands, costs, liabilities, 
expenses and damages (including attorneys’ fees) arising out of, or 
in connection with any claim in the Litigation or any separate 
litigation or any separate proceedings related to the Litigation.47 
 
Paragraph 7 makes it clear that Durkin agreed to indemnify the City for any 
claim brought against it “related to” the Pennsylvania Litigation or “arising out of” 
or “in connection with” any claim in the Pennsylvania Litigation.  That language 
 
44 Salamone v. Gorman, 106 A.3d 354, 367-68 (Del. 2014) (quoting Osborn ex rel. Osborn v. 
Kemp, 991 A.2d 1153, 1159 (Del. 2010)). 
45 GMG Cap. Invs., LLC v. Athenian Venture Partners I, L.P., 36 A.3d 776, 780 (Del. 2012).  
46 Amtower v. Hercules Inc., 1999 WL 167740, at *12 (Del. Super. Feb. 26, 1999), aff’d sub nom. 
Rowland v. Amtower, 748 A.2d 407 (Del. 2000). 
47 App. to Opening Br. at A29-30 (emphasis added). 
 
12 
 
sweeps broadly, and Delaware courts recognize the phrases “relating to” and “arising 
out of” as “paradigmatically broad terms.”48  
The trial court’s decision does not apply this language to the 2019 Declaratory 
Judgment Action.  The Superior Court correctly concluded the 2019 Declaratory 
Judgment Action did not breach Paragraph 5 of the Settlement Agreement.  The City 
does not appeal this conclusion. But, without analyzing whether the 2019 
Declaratory Judgment Action was related to or arose out of the Litigation, the 
Superior Court concluded, “[t]he City is also not entitled to indemnification for its 
costs and attorneys’ fees under Paragraph 7.”49  The City’s indemnification claim, 
however, was distinct from its breach claim under Paragraph 5, and the conclusion 
that the 2019 Declaratory Judgment Action did not breach Paragraph 5 does not lead 
inexorably to the conclusion that the City is not entitled to indemnification under 
Paragraph 7.  Paragraph 7 requires indemnification for proceedings “related to” and 
“arising out of” the Pennsylvania Litigation.  The relief Durkin sought in the 2019 
Declaratory Judgment Action was the City’s cooperation in the Pennsylvania 
Litigation, including an order requiring the City to produce documents and provide 
a witness for deposition and at trial.  That relief relates to and arises out of the 
Pennsylvania Litigation.    
 
48 Lillis v. AT & T Corp., 904 A.2d 325, 331 (Del. Ch. 2006); see Snow Phipps Grp. v. KCAKE 
Acquisition, Inc., 2021 WL 1714202, at *35 (Del. Ch. Apr. 30, 2021). 
49 Durkin III, 2023 WL 128258, at *6. 
 
13 
 
B. 
The Superior Court’s other rulings recognize the relationship 
between the Pennsylvania Litigation and the 2019 Declaratory 
Judgment Action. 
The conclusion that the Pennsylvania Litigation and the 2019 Declaratory 
Judgment Action are related is consistent with the Superior Court’s prior rulings in 
the 2019 action. In its dismissal of Durkin’s 2019 Declaratory Judgment Action, the 
Superior Court stated: “[a]fter reviewing the Complaint, Response, and 
Supplemental Briefs, it is apparent that [Durkin] requests this Court to interpret the 
terms of the Settlement Agreement and declare that [the City] is henceforward 
obligated to provide [Durkin] with requested documents for use in the Pennsylvania 
[L]itigation.”50  And in its September 2020 Opinion denying reargument, the 
Superior Court again observed: “[Durkin] seeks a declaration that the Settlement 
Agreement obligates [the City] to assist [Durkin] in its case against Cottrell (the 
Pennsylvania Litigation).”51 
The Superior Court’s analysis in this case regarding the 2019 Subpoena also 
underscores the relatedness between the 2019 Declaratory Judgment Action and the 
Pennsylvania Litigation.  The Superior Court considered the plain language of 
Paragraph 7 when it awarded the City indemnification for the 2019 Subpoena.52  In 
that portion of its analysis, the Superior Court focused on the plain meaning of the 
 
50 Durkin I, 2020 WL 2991778, at *7. 
51 Durkin II, 2020 WL 5797622, at *3. 
52 Durkin III, 2023 WL 128258, at *6. 
 
14 
 
word “claim” and held that “the attorneys’ fees and costs incurred by the City in 
moving to quash the 2019 Subpoena were incurred in a proceeding related to the 
Pennsylvania Litigation, as required by Paragraph 7.”53  That holding, which neither 
party appealed, aligns with the City’s position that Durkin’s 2019 Declaratory 
Judgment Action also is related to the Pennsylvania Litigation.  After all, the 2019 
Declaratory Judgment Action and the 2019 Subpoena sought the same relief from 
the City: production of documents and witnesses in the Pennsylvania Litigation.   
Accordingly, because indemnification was required under both the plain 
language of the Settlement Agreement and the Superior Court’s other holdings 
regarding the scope of the proceedings between the parties, the Superior Court 
should have entered judgment in the City’s favor for its indemnification claim 
relating to the 2019 Declaratory Judgment Action. 
IV. 
CONCLUSION 
For the foregoing reasons, we reverse the portion of the Superior Court’s 
January 6, 2023 Memorandum Opinion and Order awarding summary judgment to 
Durkin for the City’s claim for indemnification for the 2019 Declaratory Judgment 
Action.  This case is remanded to the Superior Court for further proceedings 
consistent with this opinion.  Jurisdiction is not retained. 
 
53 Id.