IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

TERRY FRIDDLE, BRUCE 

GEBHARDT, HENRY GORDON, 

JEFFREY GREEN, BARRY HAWK, 

ROBERT JONES, PATRICK PARKER, 

SHANNON SMITH, and CRESSON 

TECHNOLOGY INVESTORS GP, LLC,

Plaintiffs,

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C.A. No. 2021-0306-SG

CHRISTOPHER MOEHLE, ROBOTICS 

HUB FUND 1, LLC, and COAL HILL 

VENTURES, LLC,

Defendants.

ROBOTICS HUB FUND 1, LLC,

Counterclaim Plaintiff,

v.

TERRY FRIDDLE, BRUCE 

GEBHARDT, HENRY GORDON, 

JEFFREY GREEN, BARRY HAWK, 

ROBERT JONES, PATRICK PARKER, 

SHANNON SMITH, and CRESSON 

TECHNOLOGY INVESTORS GP, LLC,

Counterclaim Defendants.

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MEMORANDUM OPINION

Date Submitted: November 13, 2023

Date Decided: February 8, 2024
Thad J. Bracegirdle and Emily L. Skaug, BAYARD, P.A., Wilmington, Delaware; 

OF COUNSEL: Brian A. Katz and John G. Moon, OLSHAN FROME WOLOSKY 

LLP, New York, New York, Attorneys for Plaintiffs and Counterclaim Defendants 

Terry Friddle, Bruce Gebhardt, Henry Gordon, Jeffrey Green, Barry Hawk, Robert 

Jones, Patrick Parker, Shannon Smith, and Cresson Technology Investors GP, LLC.

Steve L. Caponi and Matthew B. Goeller, K&L GATES LLP, Wilmington, Delaware; 

OF COUNSEL: Christopher M. Verdini, K&L GATES LLP, Pittsburgh, 

Pennsylvania, Attorneys for Defendants Christopher Moehle, Robotics Hub Fund I, 

LLC, and Coal Hill Ventures, LLC, and Counterclaim Plaintiff Robotics Hub Fund 

1, LLC.

GLASSCOCK, Vice Chancellor
1

As our Supreme Court has recently opined, “[t]he courts of this State hold 

freedom of contract in high—some might say, reverential—regard.”1 This sentiment 

applies with especial weight to agreements to arbitrate, in that they carry the dual 

policy avoirdupois of respecting private ordering and promoting alternative dispute 

resolution. So much is this the case that our courts typically refer to such 

agreements, and specific enforcement thereof, as depriving the courts of 

jurisdiction.2 

It is axiomatic, however, that rights established by agreement may be waived 

by agreement as well. The scope of such a waiver is at issue here.

This litigation began in 2021. The initial complaint, and the subsequent 

counterclaims, involved a discrete set of issues, addressing whether one defendant 

had been validly removed as General Partner of a limited partnership, the “Fund.” 

The Fund was subject to a limited partnership agreement, under which the issues

above were unambiguously subject to mandatory arbitration. The parties, content, 

apparently, to have the matter settled in Chancery, agreed to waive the arbitration 

provision, to allow “the complete resolution of their disputes before this Court.”

1 Cantor Fitzgerald, L.P. v. Ainslie, 2024 WL 315193, at *1 (Del. Jan. 29, 2024).

2 As Vice Chancellor Laster recently pointed out in a scholarly review of the issue, this shorthand 

is, in fact, a misnomer. See Gandhi-Kapoor v. Hone Capital LLC, 2023 WL 8165594 (Del. Ch. 

Nov. 22, 2023).
2

In 2023, Plaintiffs filed an amended complaint. That complaint introduces 

new claims, for breach of contract and fiduciary duty. Defendants have moved to 

dismiss the new claims, arguing that these tort claims are subject to the mandatory 

arbitration provision. Plaintiffs contend that the arbitration waiver applies to these 

new claims as well.

The issue is a simple one of construing the breadth of the waiver filed by the 

parties. The parties agreed to waive arbitration for “their disputes before this Court.” 

Plaintiffs argue that the tort claims had attached as of the time of the waiver or 

resulted from the dispute between the parties, and therefore constitute a portion of 

the parties’ dispute at the time. Defendants counter that they only waived the 

“disputes before this Court”—that is, the disputes set forth in the Complaint and 

Counterclaims about whether the General Partner had been validly removed. 

Defendants aver that they did not intend to waive unknown claims, whether those 

claims had attached at the time of the agreement or not.

I find the waiver unambiguous. The only claims “before this Court” were the 

ones inhering in the pleadings at that time, as set out in the Complaint and 

Counterclaims. To the extent ambiguity did reside in the waiver agreement, 

moreover, it would be consistent with public policy to construe the waiver narrowly, 

rather than subject Defendants to an unintended forfeiture of the right to mandatory 
3

arbitration. Accordingly, the tort claims are dismissed, subject to arbitration 

consistent with the Partnership Agreement. I explain more fully, below. 

I. BACKGROUND

A. Factual Background3

1. The Fund

In 2015, Christopher Moehle formed RHFI LLC4and Coal Hill to begin an 

investment fund with an emphasis on early-stage robotics companies.5 At that time, 

Moehle also formed a Delaware limited partnership, Robotics Hub Fund 1, LP (the

“Fund”), that was to be the investment vehicle.6 Coal Hill, which is solely owned 

and controlled by Moehle, served as the investment manager of the Fund.

7

 The Fund

maintains investments in seven portfolio companies.8 

The Fund’s limited partnership agreement (the “Partnership Agreement”), 

designated RHF1 LLC as the General Partner.9 Under the terms of the Partnership 

Agreement, RHF1 LLC shall cease to be the Fund’s General Partner if a “Disabling 

Event” transpires.

10

 In the event that RHF1 LLC is removed due to the occurrence 

3 The facts in this section are drawn from the First Amended Complaint. For purposes of 

Defendants’ motion to dismiss, I accept as true the allegations Plaintiffs assert in the First 

Amended Complaint.

4 Undefined capitalized terms herein have the same meaning as in my February 25, 2022 

memorandum opinion. See Friddle v. Moehle, 2022 WL 20651183 (Del. Ch. Feb. 25, 2022).

5 First Am. Compl. ¶ 28, Dkt. No. 54 (“Am. Compl.”).

6

Id. ¶¶ 24–26.

7

Id. ¶ 25.

8

Id.¶ 29.

9

Id. ¶¶ 24–26.

10 Id. ¶¶ 42–44.
4

of a Disabling Event, the Fund will be dissolved unless a “Majority in Interest agrees 

in writing to continue the business of the [Fund] and to the appointment . . . of 

another General Partner” within 90 days of the Disabling Event.11 Regarding each

limited partner’s interest, the Partnership Agreement allows the termination thereof 

if the limited partner’s continued participation in the Fund would “result in any 

material adverse consequences to the Partnership or its Limited Partners.”12

With respect to fiduciary duties, the Partnership Agreement provides that “the 

General Partner shall act consistent with its fiduciary duties to the Limited 

Partners.”13 The Partnership Agreement dictates that “the Partnership, the General 

Partner, and the Principals shall at all times act consistently with their fiduciary 

duties to the Partners.”14 “Principal” is defined to include Moehle.15

2. The Sidecar Investments

Defendants offered Plaintiffs the opportunity to invest in the Fund’s portfolio 

companies (“Sidecars”) through Coal Hill and RHF1 LLC.16 The investments in the 

Sidecars were separate from Plaintiffs’ investments in the Fund and governed by 

Sidecar Agreements.17 The Sidecar Agreements contain language similar to the 

11 Id. ¶¶ 42–44.

12 Answer Verified Compl. and Verified Countercls. Ex. A, § 5.06(a), Dkt. No. 8 (the “Partnership 

Agreement”).

13 Am. Compl. ¶ 39 (quoting Partnership Agreement § 3.06(d)).

14 Id. (quoting Partnership Agreement § 3.06(e)).

15 Partnership Agreement Art. I.

16 Am. Compl. ¶ 1.

17 Id. ¶¶ 1–2.
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Partnership Agreement pertaining to fiduciary duties, stating that “the General 

Partner shall act consistent with its fiduciary duties to the Limited Partners.”18 

3. Financial Disclosures Under the Partnership Agreement and 

Sidecar Agreements

The Partnership Agreement and Sidecar Agreements provide that Plaintiffs 

will receive an annual disclosure of investment activity and financial reporting.19 

These disclosures are to be disseminated within four months of the close of the fiscal 

year, or “as soon thereafter as reasonably possible.”20 The transmission of these 

reports to Plaintiffs, however, was routinely delayed by seven or eight months.

21

 For

example, Plaintiffs did not receive the 2019 financial statements until January 

2021.22

As limited partners of the Fund, Plaintiffs also expected to receive quarterly 

statements about the net asset value of the Fund’s portfolio companies.23 These 

statements, however, were routinely late or never issued.24 Those statements that 

were issued often lacked financial analysis of the portfolio companies.25 Moehle 

claimed these omissions were due to the portfolio companies’ refusal to share such 

18 Id. ¶ 40.

19 Id. ¶ 61.

20 Id. (quoting Partnership Agreement § 7.02(a)).

21 Id. ¶¶ 62, 64.

22 Id. ¶ 64.

23 Id. ¶ 65.

24 Id. ¶¶ 65, 80.

25 Id. ¶¶ 66, 81–82.
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information, but representatives of some of the portfolio companies evidenced a 

willingness to share the information.26 The information that was included in these 

statements was often false or misleading,

27 as Moehle described the present value of 

the Fund’s portfolio as “exceptional” while valuing the majority of the portfolio 

companies at “cost.”28 

With respect to the Sidecar investments, Defendants never provided Plaintiffs 

with quarterly statements of the net asset value.29

4. Management of Fund Assets

In his role as a principal of the Fund, Moehle invoiced non-Fund expenses to 

Coal Hill, the investment manager of the Fund.30 Despite being separate entities 

with different partners, the administrative costs for the Sidecar investments were 

also allocated to the Fund’s limited partners.31 

In 2017, Coal Hill requested that the limited partners prepay management fees 

to enable the Fund to hire additional staff.32 The limited partners continued to be 

charged these advance management fees through 2019, prepaying approximately 

$600,000.33 The new employees whose salaries these prepaid fees were meant to 

26 Id. ¶¶ 66–68.

27 Id. ¶ 69.

28 Id. ¶ 70.

29 Id. ¶¶ 79–80.

30 Id. ¶ 85.

31 Id. ¶¶ 107–08.

32 Id. ¶¶ 90–92.

33 Id. ¶¶ 96–99.
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pay were never hired by the Fund.34 Instead, Coal Hill used these prepaid 

management funds to pay Moehle’s personal legal fees.35 Moehle also borrowed 

$150,000 from the Fund, the reason for which has not been disclosed36 and Moehle 

charged the Fund for international trips that were unrelated to the Fund’s business 

by misrepresenting the business purposes of the trips.37 

As a result of these activities, the Fund lacks liquidity to cover its operation 

costs.38

5. The Conflicted Transactions

In 2015, prior to forming the Fund, Moehle created JDV Robotics (“JDV”).39 

Moehle concealed his involvement in JDV from Plaintiffs by claiming JDV was 

owned by the University of Pittsburgh Medical Center.

40

 However, JDV’s registered 

corporate address is Moehle’s home address and Moehle is listed the sole officer of 

JDV.41

34 Id. ¶¶ 93–94, 100.

35 Id. ¶¶ 90, 102–04.

36 Id. ¶¶ 86–88.

37 Id. ¶ 105. For example, Moehle billed the Fund for an April 2019 trip to Dubai to review 

collaborations that several portfolio companies had entered into in the region, however, the 

portfolio company named in the update to explain the trip has no such collaborations in Dubai. Id. 

¶ 106.

38 Id. ¶¶ 109–12.

39 Id. ¶ 115.

40 Id. ¶ 116.

41 Id. ¶ 117.
8

Once the Fund was formed, Moehle caused the Fund to enter into a convertible 

note with JDV, whereby the Fund loaned JDV $200,000.42 Moehle signed the 

convertible note on behalf of both the Fund and JDV.43 This loan to JDV also 

included a $50,000 consulting fee paid to Moehle from JDV.44 Despite JDV’s 

insolvency, Moehle caused the Fund to extend credit by claiming that Fund’s JDV 

notes had more favorable terms than other portfolio companies.45 The Fund has not 

disclosed its investment in JDV, nor does the Fund list JDV as one of its portfolio 

companies.46 

In October 2017, Moehle, through his control of Coal Hill, also merged 

Robotics Hub Special Purpose Vehicle (“RHSPV”) interest, worth $125,000, into 

the Fund.

47

 Coal Hill earned a 12% annual return from the Fund from this 

transaction.

48 Prior to the merger, Coal Hill’s investment in RHSPV was maintained 

on an interest-free loan from the Fund since late 2016.

49

 These transactions resulted 

in Moehle, through his control of Coal Hill, earning 12% return on the limited 

partners’ capital, without compensating the Fund.50 Moehle further asserted his 

42 Id. ¶ 115. 

43 Id.

44 Id. ¶ 118.

45 Id. ¶ 123.

46 Id. ¶ 121.

47 Id. ¶ 124.

48 Id.

49 Id.

50 Id.
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control to ensure that the merger date was delayed to maximize his personal profit 

from the transaction.51

In 2019, Moehle represented to some of the Fund’s portfolio companies that 

he would raise funds for them through investment opportunities offered to RHF1 

investors.

52

 Plaintiffs, who were RHF1 investors, were not informed of these 

offerings.53 Instead, Moehle created another fund, “The Robotics Hub Fund 2, LP,” 

to make these additional investments into the Fund’s portfolio companies.54 The 

investors who gave “The Robotics Hud Fund 2, LP” funds were given preemptive 

rights to purchase future issuance of equity securities.

55

 Plaintiffs were not given 

the opportunity to invest in this separate fund and, as a result of the creation of “The 

Robotics Hud Fund 2, LP,” Plaintiffs’ holdings in the portfolio companies were 

diluted.56 Thereafter, Moehle informed the Fund’s limited partners that the Fund 

was closed.57 At that time, the Fund’s assets comprised $8 million.58

51 Id.

52 Id. ¶ 125.

53 Id.

54 Id. ¶¶ 125–26.

55 Id. ¶ 126.

56 Id. Defendants further diluted Plaintiffs’ holdings by creating other new entities that utilized 

the Fund’s pro rata investment rights and Moehle’s relationships with the portfolio companies. Id. 

¶ 131. These new entities had a 20% carry to Moehle compared to the 10% carry associated with 

the Fund Sidecars in which the Limited Partners had invested. Id.

57 Id. ¶ 130.

58 Id.
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6. Litigation Ensues Regarding a “Disabling Event”

In March 2021, Plaintiffs purportedly removed RHF1 as General Partner 

following the alleged occurrence of a “Disabling Event” under the Partnership 

Agreement; the nature of the “event” is discussed below.59 Plaintiffs notified RHF1 

of its removal on March 15, 2021.60 Cresson GP was chosen as the Fund’s new 

general partner and, using its purported authority as the general partner, removed 

Coal Hill as the Fund’s manager.61 

When RHF1 refused to accept its removal as General Partner of the Fund,62

Plaintiffs initiated this action by filing a complaint (the “Complaint”) on April 12, 

2021,63 along with a motion to expedite.64 Defendant RHF1 filed counterclaims (the 

“Counterclaims”) challenging the validity of its purported termination as the General 

Partner of the Fund.65 On May 20, 2021, the parties submitted a joint letter to the 

Court explaining that, while the Partnership Agreement contained a mandatory 

arbitration provision, the parties “mutually agreed to waive the arbitration provision 

to permit the complete resolution of their disputes before this Court.”66 The matter

59 Id. ¶¶ 134–35.

60 Id. ¶ 135.

61 Id. ¶ 137.

62 Id. ¶ 141.

63 Verified Compl., Dkt. No. 1.

64 Pls.’ Mot. for Expedited Proceedings, Dkt. No. 2.

65 See Answer Verified Compl. and Verified Countercls., Dkt. No. 8.

66 Joint Letter to Vice Chancellor Glasscock, Dkt. No. 15 (the “Joint Letter”).
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was expedited that same day.

67

 The parties filed cross-motions for judgment on the 

pleadings on July 21, 2021.68 

The parties requested that the Court determine whether an operative complaint 

filed in federal court by a former board member of the Moehle entities (the 

“Operative Complaint”) against Defendants in the instant case was a “Disabling 

Event,” as defined by the Partnership Agreement, which would automatically 

remove RHF1 LLC as the Fund’s General Partner.69 On February 25, 2022, I issued 

a memorandum opinion granting Defendants’ motion for judgment on the pleadings 

and denying Plaintiffs’ motion for partial judgment on the pleadings.70 I determined 

that the Operative Complaint did not meet the contractual definition of a Disabling 

Event.71 Since the counts contained in Plaintiffs’ original complaint all arose from 

Plaintiffs’ contention that the Operative Complaint was a Disabling Event, I 

dismissed Counts I, II, and III.72 The February 25, 2022 memorandum opinion did 

not resolve Plaintiffs’ motion to dismiss the Counterclaims brought by RHF1 LLC.73

On September 13, 2022, Defendants notified Plaintiffs that they had “been 

removed from the Fund effective May 31, 2021, and [Plaintiffs’] limited partnership 

67 See Tr. Tel. Scheduling Conf. 3:20–23, Dkt. No. 22.

68 See Defs.’ Countcl. Pl.’s Mot. J. Pleadings, Dkt. No. 26; Pls.’ Mot. Partial J. Pleadings, Dkt. No. 

27.

69 Friddle v. Moehle, 2022 WL 201651183, at *3–4.

70 See id. at *11.

71 Id. at *5–10.

72 Id. at *11.

73 See id. at *1 n.2.
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interests have been terminated.”74 Plaintiffs were not provided consideration for the 

termination of their interests.75

B. Procedural Posture 

On March 8, 2023, Plaintiffs filed a motion for leave to file an amended 

complaint.76 The parties fully briefed the motion and I heard oral arguments on May 

10, 2023.77 I granted Plaintiffs’ request to file an amended complaint.78 In doing 

so, I withheld a ruling determining whether there had been a waiver of the binding 

arbitration clause with respect to any newly asserted claims in the forthcoming 

amended complaint.

79

 

Plaintiffs filed the amended complaint (the “Amended Complaint”) on June 

2, 2023.80 The Amended Complaint realleges Counts I–III81 and includes two new 

counts: Count IV for breach of fiduciary duty and Count V for breach of contract.82

Both claims are predicated on Moehle’s alleged misuse of the Fund’s assets and 

Defendants’ purported termination of Plaintiffs as limited partners in September 

74 Am. Compl. ¶ 142.

75 Id. ¶ 143.

76 Pls.’ Mot. for Leave to File First Am. Verified Compl., Dkt. No. 47.

77 See Judicial Action Form re: Tel. Mot. before Vice Chancellor Sam Glasscock dated 5.10.23, 

Dkt. No. 106.

78 See id.

79 See id.

80See Am. Compl.

81 Plaintiffs reallege these already-dismissed counts for the purpose of preserving Plaintiffs’ right 

to appeal. See Am. Compl. 1 n.1.

82 Am. Compl. ¶¶ 162–69.
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2022.

83

 On July 28, 2023, Defendants filed a motion to dismiss the Amended 

Complaint under Rules 12(b)(1) and 12(b)(6).

84

 The parties finished briefing 

Defendants’ motion on October 13, 2023.85 I heard oral arguments on November 

13, 2023.86 I consider the matter fully submitted as of that date.87

II. ANALYSIS

The Partnership Agreement provides that “[a]ll disputes between the Partners 

arising under this Agreement will be resolved by arbitration in the county and state 

in which the General Partner maintains its principal office at the time the request for 

such arbitration is made . . . .”88 The parties agree that this is a valid arbitration 

clause.89 Nor is there a dispute that Counts IV and V are within the scope of the 

arbitration clause.90 Rather, the parties dispute whether their joint letter to the Court,

dated May 20, 2021 (the “Joint Letter”), constitutes a valid waiver of Defendants’ 

83 Id. ¶¶ 164, 168.

84 Defs.’ Mot. to Dismiss Pls.’ First Am. Compl., Dkt. No. 98.

85 See Defs.’ Reply Supp. Defs.’ Mot. to Dismiss First Am. Compl., Dkt. No. 104.

86 See Judicial Action Form re: Oral Arg. before Vice Chancellor Sam Glasscock dated 11.13.23, 

Dkt. No. 107.

87 During the November 13, 2023 oral arguments, I declined to hear arguments with respect to 

RHF1’s counterclaims. Instead, I requested that the parties submit a letter explaining the status of 

those claims in light of my February 25, 2022 memorandum opinion and what impact, if any, my 

decision on Defendants’ motion to dismiss the Amended Complaint would have on the outstanding 

counterclaims. The parties submitted the requested letter on November 28, 2023. See Letter to 

The Hon. Sam Glasscock III, Dkt. No. 108.

88 Partnership Agreement § 9.05(a).

89 Opening Br. Supp. of Defs.’ Mot. to Dismiss Pls.’ First Am. Verified Compl. 9, Dkt. 98 (“Defs.’ 

OB”); see Pls.’ Answering Br. Opp’n Defs.’ Mot. to Dismiss 15–19, Dkt. No. 101 (“Pls.’ AB”). 

90 Defs.’ OB 9–10; see Pls.’ AB 15–19.
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ability to enforce the arbitration provision with respect to these two new counts.91 

Before I can address whether the Amended Complaint should be dismissed for 

failure to state a claim, I must first determine whether Defendants have waived their 

right to enforce the Partnership Agreement’s mandatory arbitration provision.

A. Rule 12(b)(1) and Waiver of the Mandatory Arbitration Provision

Under Court of Chancery Rule 12(b)(1), the Court routinely dismisses claims 

that are subject to a valid arbitration agreement.92 An arbitration provision, like any 

contractual provision, can be waived if the parties consent.93 “Waiver of arbitration 

is a matter of intention and to constitute a waiver there must be an intentional 

relinquishment of a right with both knowledge of its existence and intention to 

relinquish it.”94 While “waiver may be express or implied”95 the waiver of an 

arbitration provision requires “clear and convincing evidence[.]”96 Arbitration is 

strongly favored under Delaware law and policy,97 so “waiver is not lightly 

inferred.”98 

91 See Defs.’ OB 10; Pls.’ AB 15–16.

92 See Li v. Standard Fiber, LLC, 2013 WL 1286202, at *4 (Del. Ch. Mar. 28, 2013) (“[A] Rule 

12(b)(1) motion will be granted if the parties contracted to arbitrate the claims asserted in the 

complaint.”).

93 See Parfi Hldg. AB v. Mirror Image Internet, Inc., 842 A.2d 1245, 1260 n.39 (Del. Ch. 2004) 

94 James Julian, Inc. v. Raytheon Serv. Co., 464 A.2d 665, 668 (Del. Ch. 1980) (quoting 6 C.J.S. 

Arb. § 37 (1975)).

95 Dirienzo v. Steel P’rs Hldgs. L.P., 2009 WL 4652944, at *4 (Del. Ch. Dec. 8, 2009).

96 Zaret v. Warners Moving Storage, 1995 WL 56708, at *1 (Del. Ch. Feb. 3, 1995).

97 Fraternal Order of Police Del. Lodge 10, 2017 WL 6055375, at *2 (Del. Ch. Dec. 7, 2017) 

(“[F]avoring arbitration is a clearly defined public policy under Delaware law.”).

98 Halpern Med. Servs., LLC v. Geary, 2012 WL 691623, at *3 (Del. Ch. Feb. 17, 2012).
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Plaintiffs’ arguments in favor of concluding that Defendants waived their 

ability to enforce the arbitration provision can be grouped into two categories: (1) 

the language of the Joint Letter expressly waives the arbitration provision or, in the 

alternative, (2) Defendants’ actions in this litigation indicate an implicit waiver.99 I 

take each category in turn, below.

1. Explicit Waiver: The Joint Letter

An explicit waiver occurs “where it is clear from the language used that the 

party is intentionally renouncing a right that it is aware of.”100 Where the parties 

have agreed, in writing, to waive an arbitration provision, “the Court will give 

priority to the parties’ intentions as reflected in the four corners of the agreement.”101 

If the agreement is clear and unambiguous, “extrinsic evidence may not be used to 

interpret the intent of the parties, to vary the terms of the contract or to create an 

ambiguity.”102

The Joint Letter, which Plaintiffs allege constitutes an explicit waiver of the 

arbitration provision with respect to Counts IV and V, states, in relevant part:

By way of background, the [Partnership Agreement] . . . at issue in this 

action contains a mandatory arbitration provision (Section 9.05). While 

the parties disagree as to the provision’s application to [P]laintiffs’ 

claims in this action, [the parties] wish to inform the Court that they 

99 Pls.’ AB 16–19.

100 Dirienzo, 2009 WL 4652944, at *4.

101 GMG Cap. Invs., LLC v. Athenian Venture P’rs I, L.P., 36 A.3d 776, 779 (Del. 2012).

102 Eagle Indus., Inc. v. DeVilbiss Health Care, Inc., 702 A.2d 1228, 1232–33 (Del. 1997).
16

have mutually agreed to waive the arbitration provision to permit the 

complete resolution of their disputes before this Court.103

Plaintiffs contend that Defendants’ agreement to waive the arbitration 

provision “to permit the complete resolution of their disputes before this Court” 

constitutes unambiguous agreement by Defendants to fully waive the arbitration 

provision in the course of this litigation.

104

 According to Plaintiffs, because the term 

“disputes” is not limited in scope to specific claims, pleadings, or disputes, 

Defendants cannot enforce the arbitration agreement with respect to Counts IV and 

V, even though those claims were not brought by Plaintiffs until two years after the 

Joint Letter was filed.105 

In further support of their argument, Plaintiffs note that, in a letter filed 

separately by Defendants on May 20, 2021, Defendants paraphrased the language of 

the Joint Letter, stating “the parties have mutually agreed to waive the arbitration 

provision [in the Partnership Agreement] to permit the complete resolution of their 

disputes before this Court.”106 Plaintiffs ask that the Court view this language with 

the knowledge that Defendants are sophisticated parties with sophisticated counsel 

who “clearly understand that the word ‘dispute’ is broader than specific causes of 

103 Joint Letter.

104 See Pls.’ AB 16 (quoting the Joint Letter) (emphasis added).

105 Pls.’ AB 16.

106 Id. at 17 (quoting Letter to Vice Chancellor Glasscock from Steven L. Caponi re Pls.’ Mot. to 

Expedite and Schedule, Dkt. No. 16) (emphases added) (“Defs.’ Letter”).
17

action, and that any given legal ‘dispute’ includes multiples claims that are not static 

but can be amended and supplemented.”107 

Defendants submit that the one sentence in the Joint Letter relied upon by 

Plaintiffs as evidence of waiver does not constitute an “intentional relinquishment 

of a right with both knowledge of its existence and intention to relinquish it.”108 

Rather, Defendants advocate for a narrow reading of the language of the Joint Letter

and that such reading demonstrates that Defendants’ waiver of the arbitration 

provision was limited to the known claims asserted at the time the Joint Letter was 

filed.109 I agree. 

The Joint Letter states, “While the parties disagree as to the provision’s 

application to [P]laintiffs’ claims in this action, [the parties] wish to inform the Court 

that they have mutually agreed to waive the arbitration provision to permit the 

complete resolution of their disputes before this Court.”110 This statement is written 

in the present tense and, therefore, must be read as of the date the Joint Letter was 

submitted to the Court. As I read the Joint Letter, it is unambiguous that, as of May 

20, 2021, Defendants were only aware of the counts asserted in Plaintiffs’ original 

complaint, filed on April 12, 2021, and Defendants’ counterclaims, filed on May 14, 

107 Id.

108 James Julian, Inc., 464 A.2d at 668 (quoting 6 C.J.S. Arb. § 37 (1975)).

109 Defs.’ OB 12–13. 

110 Joint Letter.
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2021. The claims asserted prior to the Joint Letter related to (1) whether there had 

been a Disabling Event that enabled Plaintiffs to remove RHF1 and Coal Hill as 

General Partner and manager of the Fund, respectively, and (2) if there was no such 

Disabling Event, whether RHF1 could remove Plaintiffs as Limited Partners under 

the terms of the Partnership Agreement.

111

 These claims did not include breach of 

contract nor breach of fiduciary duty, i.e., Counts IV or V. These torts are based, I 

note, in part on Defendants’ action not yet taken at the time of the waiver.

Thus, a reading of the plain text of the Joint Letter illustrates that Defendants 

knowingly and intentionally waived their right to enforce the arbitration provision 

solely to those claims that were asserted as of the Joint Letter’s submission, that is,

Counts I–III of the original complaint and Defendants’ counterclaims. As

Defendants were not aware that Plaintiffs would assert Counts IV and V until nearly 

two years later, Defendants could not have known that their agreement in the Joint 

Letter to waive the arbitration provision would expose them to litigation over these

not-yet-asserted claims. Therefore, the language of the Joint Letter demonstrates 

that Defendants’ explicit waiver of the arbitration provision does not extend to 

Counts IV and V.

111 See Verified Compl., Dkt. 1.
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2. Implicit Waiver: Defendants’ Conduct in This Litigation

Even if “no express language is used, an implied waiver of a right is possible, 

but only if there is ‘a clear, unequivocal, and decisive act of the party demonstrating 

relinquishment of the right.’”112 A party taking actions “inconsistent with his right 

to arbitration, such as active participation in a lawsuit, shows an intent to relinquish 

his right to arbitration.”113 While a parties’ actions may implicitly waive their right 

to enforce an arbitration waiver, such waiver is not lightly inferred.114 When 

considering whether a party implicitly waived its right to arbitration, the Court 

considers “not merely the inconsistency of a party’s actions, but the presence or 

absence of prejudice which is determinative of the issue of waiver.”115 Typically, 

implicit waiver is found only where “the demand for arbitration or dismissal due to 

the arbitrability of the claims came along after the suit commenced and when both 

parties had engaged in extensive discovery.”116

112 Dirienzo, 2009 WL 4652944, at *5 (quoting 28 Am. Jur. 2d Estoppel and Waiver § 209 (2009)).

113 Zaret, 1995 WL 56708, at *1.

114 See, e.g., Zenon v. Dover Downs, Inc., 2022 WL 2304118, at *2 (D. Del. June 27, 2022) (finding 

a party had not waived their right to enforce an arbitration provision even where that party filed an 

answer that did not assert arbitration as a defense, but sought to compel arbitration within six 

months of the complaints filing); Morgan v. Sundance, Inc., 596 U.S. 411, 414–15, 419 (2022) 

(reversing a lower court’s ruling that a party waived it right to arbitrate under the Federal 

Arbitration Act where the party (1) filed an answer containing no mention of the arbitration 

provision; (2) participated in a mediation; and (3) waited eight months before seeking to compel 

arbitration).

115 Halpern Med. Servs., LLC, 2012 WL 691623, at *3 (citation omitted).

116 Id.
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Plaintiffs contend that Defendants’ actions during the course of this litigation

establish Defendants’ intent to relinquish their right to arbitration.117 In making this 

argument, Plaintiffs rely on two actions taken by Defendants that Plaintiffs allege 

are contrary to Defendants’ claim that the waiver in the Joint Letter was limited to 

the Counts I–III.

118

 First, Plaintiffs contend that Defendants would not have filed 

counterclaims in this action if Defendants’ waiver of the arbitration provision was 

limited to the claims asserted by Plaintiffs in the original complaint.119 Second, 

Plaintiffs point to Defendants’ language in a separate letter filed on May 20, 2021, 

as evidence that Defendants understood the waiver to extend to resolving all disputes 

before the Court, including later-asserted claims because complaints can be amended 

and supplemented.

120

 These actions, without more, are insufficient to demonstrate 

that Defendants acted inconsistent with their right to enforce the arbitration 

provision with respect to Counts IV and V.

Since Defendants filed their counterclaims on May 14, 2021, these 

counterclaims were known to both parties at the time the Joint Letter was submitted 

to the Court.121 Under the plain terms of the Joint Letter’s waiver, these 

counterclaims are within the scope of the “disputes before this Court[]” at the time 

117 Pls.’ AB 17.

118 Id.

119 Id.

120 Id.

121 See Answer to Verified Compl. and Verified Countercls., Dkt. No. 8.
21

of the Joint Letter’s submission.122 Defendants’ decision to file the counterclaims in 

response to Plaintiffs’ claims in the original complaint is not an indication that 

Defendants intentionally relinquished their right to enforce the arbitration agreement 

for Counts IV and V, which were not yet known to Defendants.

Defendants’ counterclaims themselves relate directly to the same subject 

matter as Counts I–III—whether there had been a Disabling Event and whether, as 

a result of “engineering the so-called ‘disabling event[,]’” Defendants could 

terminate Plaintiffs’ limited partnership interests.123 The filing of these 

counterclaims is not inconsistent with Defendants’ right to arbitrate Counts IV and 

V because Defendants agreed to waive the arbitration provision to resolve the 

disputes then before the Court, namely Counts I–III and Defendants’ counterclaims. 

As for Defendants’ decision to file a separate letter filed on May 20, 2021, 

that reiterated to the Court that “the parties have mutually agreed to waive the 

arbitration provision [in the Partnership Agreement] to permit the complete 

resolution of their disputes before this Court[,]”124 this letter does not purport to 

expand the Joint Letter’s waiver. Indeed, it mirrors the pertinent language in the 

Joint Letter by reiterating that the waiver of the arbitration provision was limited to 

122 Joint Letter.

123 Defs.’ RB 3.

124 Defs.’ Letter.
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the “disputes before this Court.”125 Defendants’ letter goes on to explain that the 

central issue was whether or not a Disabling Event occurred.126 There is no 

indication from the language of Defendants’ letter or the filing of the letter itself that 

indicates that Defendants were issuing a blanket waiver of their right to arbitrate any 

claims that could be later be brought against them by Plaintiffs. Defendants issued 

the May 20, 2021 letter many months before Plaintiffs sought to add the tort claims. 

Since Plaintiffs sought to amend their complaint to assert two new claims,

Defendants have sought to enforce their right to arbitrate. Defendants asserted their 

right to arbitrate in both their opposition to Plaintiffs’ request for leave to amend 

their complaint127 and in their arguments in support of their motion to dismiss the 

newly added claims.128 Defendants’ actions with respect to Counts IV and V have 

been consistent with their right to arbitrate. Plaintiffs have not alleged any prejudice 

they will face if Defendants are allowed to assert their right to arbitrate these new 

claims.129 Thus, the evidence before the Court is insufficient to find that Defendants 

implicitly waived their right to arbitrate Counts IV and V.

125 See id.

126 See id.

127 See Defs.’ Opp’n to Pls.’ Mot. for Leave to File First Am. Verified Compl. ¶¶ 4–14, 30–41,

Dkt. No. 50.

128 See Defs.’ OB 9–14; Defs.’ RB 1–7.

129 See Pls.’ AB 15–19.
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III. CONCLUSION

The parties’ agreement to waive the mandatory arbitration provision 

contained in the Partnership Agreement was limited to the claims before the Court 

at the time of Joint Letter’s filing on May 20, 2021. Defendants’ waiver of their 

right to arbitrate those claims in 2021 does not extend to claims Plaintiffs chose to 

bring nearly two years later. Since the filing of the Amended Complaint, 

Defendants’ actions have been consistent with their right to arbitrate. Therefore, 

Defendants’ motion to dismiss is GRANTED. The parties should submit an 

appropriate form of order in accordance with this opinion and inform me of their 

intention regarding the claims not addressed here.