1

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
SUPPI CONSTRUCTION , INC. ) a Delaware Corporation, ) ) Plaintiff, ) ) C.A. N o. N 18L

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- 009 AML v. ) ) EC DEVELOPMENTS I, LLC, ) a Nevada corporation, ) FRONTIER BUILDING CORP., ) a Florida corporation, ) PANDA RESTAURANT GROUP, INC., ) a California corporation, ) PANDA EXPRESS, INC ., ) a California corporation, ) MBOS CONCESSIONS, LLC , ) a Delaware limited liability company, ) ) Defendants

. )

Submitted: September 2 7 , 20 22 Decided: December 8 , 2022 ORDER Upon Plaintiff’s Motion to Enforce Settlement Agreement : DENIED
1. The plaintiff seeks to enforce a settlement agreement it contends the parties reached in May or June 2022. Although it is undisputed that the parties agreed to an amount to be paid to resolve the plaintiff’s claims, they could not agree on the scope of a release of claims. That disagreement caused the plaintiff to represent to this Court that the action was not settled and that the plaintiff was not2

willing to engage in further discussions. Then, three weeks later, the plaintiff purported to accept the l ast settlement agreement proposed by the defendant, which the plaintiff previously had rejected as unacceptable. The question before this Court is whether these circumstances meet the plaintiff’s burden to prove that the parties agreed upon all essential settlement terms. Because the record does not support the plaintiff’s position that the parties entered into an enforceable agreement, the plaintiff’s motion is denied.
FACTUAL BACKGROUND
2. This action arises out of a Subcontrac t (the “Subcontract”) between
Defendant Frontier Building Corp. (“Frontier”) as general contractor and Plaintiff Suppi Construction, Inc. (“Suppi”) as subcontractor. The Subcontract relate d to site
work for construction of a new Panda Express Restaurant at 4704 Kirkwood Highway, Wilmington, Delaware (the “Property”).
3. On November 5, 2018, P laintiff filed a c omplaint and s tatement of

m echanic ’s l ien (the “Complaint”) against Frontier and several other entities. 1 The
C omplaint sought a mechanic’s lien and an i n rem judgment in the amount of $114,647.98 against the Property. The C omplaint also sought judgment in the amount of $114,647.98 against Frontier based upon an alleged breach of the
Subcontract and against Panda Restaurant Group, Inc., Panda Express Inc. and

1 Compl. ¶¶ 2

- 6.3

MBOS Concessions LLC (collectively the “Panda Entities” ) under theories of quantum meruit and unjust enrichment

. Finally, the C omplaint assert ed a claim against Frontier for an alleged violation of 6 Del . C. § 3501

. 4. Trial in this matter was scheduled to begin on May 2, 2022. 2 In the
weeks before trial, the parti e s engaged in settlement negotiations. As a result of those efforts, the parties reached a n agreement on an amount to be paid to resolve the litigation, subject to negotiating the terms of a formal settlement agreement, including an acceptable mutual release. 3
5. On April 26, 2022, P laintiff circulated a proposed settlement agreement (the “April 26 Proposal”). 4 The April 26 P roposal contained release language that

was not wholly reciprocal . Specifically, Plaintiff’ s release of claims against Defendants expressly excluded claims for fraud and for conduct after the date of the agreement , while Defendants ’ release of claims against Plaintiff did not contain
those exclusions. 5 Defendants responded on April 26 that the release language was not acceptable.

2 Trial in this matter was delayed several times. Trial initially was scheduled to take place on November 29, 2021 , but was rescheduled to May 2, 2022, when the parties requested additional time for discovery and to prepare the pretrial stipulation

. On Febr uary 28, 2022, Defendants’ c ounsel asked the Court to refer the case to mediation in ad vance of trial. The Court granted the request on March 3, 2022. Then , on April 6, 2022, Defendants’ c ounsel requested a one

- week extension to mediate the case. The Cour t granted the extension. 3 Defendants’ Response in Opposition to Plaintiff’s Motion to Enforce Settlement Agreement and for an Award of Attorneys’ Fees (hereinafter “ “Defs.’ Resp. in Opp.”) at 3 , Ex A. 4 Defs.’ Resp. in Opp. at 3 , Ex. B. 5 Id

. at 3 , Ex. B ¶

¶ 4

- 5

.4

6. On April 28, 2022, P laintiff circulated another proposed settlement agreement (the “April 28 Proposal” )

. The April 28 P roposal eliminate d the exclusion
for fraud but continued to exclude a release of potential claims against Defendants arising out of any conduct occurring after the date of th e settlement a greement. 6 In
other words , the release Plaintiff pr oposed to give Defendants still was not reciprocal. Defendants refused to accept the April 28 Proposal.
7. Later that day, the Court conducted a status and pretrial conference (the “Pretrial Conference”). During the P retrial C onference, the parties represented to the Court that they ha d been unable to settle the case because they could not reach an agreement on the terms of a release. Counsel agreed they were not prepared to try the case on May 2 nd

. As a result of this update, the Court o rdered the p arties to reach a settlement or participate in a further round of mediation by May 20, 2022. If the parties were unable to reso lve the case by May 20 th , the Court would provide counsel
a new trial date. 7
8. On May 11, 2022, D efendants circulated a revised proposed settlement agreement (the “May 11 Proposal” ). The May 11 P roposal str uck the non
- reciprocal release language favoring P l aintiff and added additional language related to the scope of the mutual release. Defendants’ proposal struck the release language that

6 Id

. at 3 , Ex. C ¶ 4. 7 Judicial Action Form, D. I. 113

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expressly excluded claims arising in the future , a nd specifically list ed “Contract” and “Contract Work” as included within the release. 8 O n May 1 9 , 2022, in response to the May 11 P roposal , P laintiff advised D efendants that “the edits proposed by the defendants are not acceptable to Suppi

. ” 9
9. On May 20, 2022, the parties pr ovided a status update to the Court (the “May 20 Status Report” )

. 10 The May 20 Status Report informed the Court that the parties ha d not been able to agree upon the settlement language. P laintiff advis ed the
Court that P laintiff ha d provided its “ definitive position on settlement language. ” Defendants stated Plaintiff’s proposed settlement language was unreasonable and Defendants remained willing to mediate.
10. Three weeks later , without any further discussion between the parties,
P lai ntiff sent D efendants a signed copy of the previously rejected May 11 Proposal,
which Plaintiff edited to include a new proposed payment date of June 30, 2022. Defendants responded on June 27, 2022 . In their response, De fe ndants stated Plaintiff had reject ed the May 11 Proposal, and payment on the terms now requested by P laintiff should not be expected.
11. The Court convened a nother status conference on July 12, 2022 . During that conference, Plaintiff took the position that the matter was settled upon Plaintiff

8 Defs.’ Resp. in Opp

. at 3 , Ex. D ¶ 4. 9 Id

. at 4 , Ex. E. 10 Id

. at 4 , Ex. F.6

signing the May 11 Proposal. For that reason, Plaintiff argued further mediation was
not warranted. P laintiff filed this Motion to Enforce th e S ettlement A gr eement (the “Motion”) on July 27, 2022. Plaintiff’s M otion also seeks an award of attorneys’
fees. The parties argued the M otion on September 27, 2022 , after which the Court
took the M otion under advisement.
ANALYSIS
12. The issue before the Court is whether the parties reached a binding settlement agreement

. Delaware courts encourage negotiated resolutions to contested cases, and settlement agreements are enforceable as contract s
. 11 As the party seeking to enforce the purported agreement, P laintiff bears the burden of proving the existence of a contract by a preponderance of the evidence. 12 In determining whether Plaintiff has met its burden, the Court must inquire: whether a reasonable negotiator in the position of one asserting the existence of a contract would have concluded, in that setting, that the agreement reached constituted agreement on all of the terms that the parties themselves regarded as essential and thus that that agreement concluded the negotiations

. . . . 13

11 Schwartz v. Chase , 2010 WL 2601608, at *4 (Del. Ch. Jun. 29, 2010); Asten, Inc. v. Wangner Sys. Corp. , 1999 WL 803965, at *1 (Del. Ch. Sept. 23, 1999). 12 Schwartz , 2010 WL 2601608, at *4

. 13 Loppert v. WindsorTech, Inc. , 865 A.2d 1282, 1285 (Del. Ch. 2004) (quoting Leeds v. First Allied Conn. Corp. , 521 A.2d 1095, 1097 (Del. Ch. 1986) )

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It is the parties’ ove rt manifestations of assent, rather than their subjective intent,
that controls the determination of whether an agreement was reached on all material

terms. 14
13. Delaware law requires a contract to contain all material terms in order to be enforceable, and s pecific performance only will be granted when an agreement
is clear , definite, and a court does not need to supply essential contract terms. 15
When settlement terms are left to future negotiation, as they were in this case, the enforceability of an agreement depends on “the relative importance and severability of the matter left to the future.” 16 The relative importance of a term is by its nature a
fact

- intensive inquiry. The absence of an agreement on a particular term has been
found to be immaterial where other terms in the parties ’ agreement allow the Court to enforce the parties ’ bargain. 17 Where, however, the unresolved terms are material and the parties ’ intent cannot be gleaned from other aspects of the agreement, n o enfor ceable contract exists

. 18

14 United Health All., LLC v. United Med., LLC , 2013 WL 6383026, at *6 (Del. Ch. Nov. 27, 2013). 15 Ramone v. Lang , 2006 WL 905347, at *10 (Del. Ch. Apr. 3, 2006). 16 Asten, Inc. , 1999 WL 803965, at *2. 17 Spacht v. Cahall, 2016 WL 6298836, at *4 (Del. Super. Ct . Oct. 27, 2016) (citing Asten , Inc. , 1999 WL 803965, at *2

– 3 (concluding unresolved administrative issue as to how to effect division of proceeds paid in kind rather than in cash did not constitute omission of material term); Hendry v. Hendry , 1998 WL 294009, at *2 (Del. Ch. June 3, 1998) (holding exact property line description was not an essential term because other terms of the contract allowed the Court to enforce the parties' agreement) )

. 18 Spacht, 2016 WL 6298836, at *4 ( citing Schwartz , 2010 WL 2 601608, at *10

- 11 )

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14. Plaintiff advances two independent theories in support of its Motion. First, Plaintiff contends the parties reached a settlement on May 11, 2022, because they agreed to all material terms on that date. According to Plaintiff, the scope of the release language was not a material term and th erefore the parties’ failure to agree

as to the precise scope of a release does not preclude a finding that a settlement was
reached. In order to resolve this argument, the Court must determine whether the scope of the release language was “so essential to the bargain that to enforce the promise would render enforcement of the rest of the agreement unfair.” 19
15. Plaintiff argues that on May 11, 2022, when D efendants removed from
the release the exclusion for claims arising after the date of the s ettlement agreement
and listed “Contract” and “Contract Work” as part of the release , 20 D efendants did not request any other substantive edits to the language the parties had negotiated

. As such, Plaintiff contends , the parties had a meeting of the minds a nd were in agreement on all other terms and language as of that date

. 21 Plaintiff maintains the only issue left to negotiate was whether the release contained any carve out for claims arising in the future

. 22 According to P laintiff, D efendants’ attempt to expand
the release to include future claims was of no material significance because “[t]he

19 Asten, Inc. , 1999 WL 803965, at *2. 20 Plaintiff ’s Motion to Enforce Settlement Agreement and f or an a ward of Attorney s’ F ees (hereinafter “ Pl

. ’s Mot. ” ) at 2, Ex

. A , ¶ 4. 21 Id . at 2. 22 Id

. at 2

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rule in Delaware is that a release cannot apply to future conduct.” 23 T herefore , according to the P laintiff , there was nothing of consequence left to nego tiate after
Defendants made the May 1 1 P roposal , and an enforceable settlement had been
reached. 24
16. Second, Plaintiff argue s that even if the parties did not reach an agreement on May 11 th , the parties came to a meeting of the minds on June 13 th when
P laintiff accepted the May 1 1 P roposal. 25 On June 13, 2022, P laintiff responded to its own May 19 th email, writing to D efendants that “Suppi has decided to sign Defendants’ last form of settlement agreement.” 26 Plaintiff signed a “clean” copy of the May 11 P roposal and changed the payment deadline to June 30, 2022. 27 Plaintiff claims that other than the change in the payment deadline, P laintiff accepted the May
11 p roposal as presented by D efendants, which was a “ mirror image acceptance. ” 28
17. Defendants , on the other hand, argue no enforceable agreement was reached because (1) the language of the release was an essential settlement term
upon which the parties did not agree, and (2) P laintiff’s rejection of the May 11

23 Id

. at 3 (citing UniSuper Ltd. v. News Corp., 898 A.2d 344, 348 (Del. Ch. 2006)). 24 Id

. at 2. 25 Id

. at 3

- 4 , ¶¶ 8

- 9. On May 19, 2022, Plaintiff responded to Defendants’ May 17 th email inquiring about a response to the proffered edits to the release reflected in the May 11 P roposal. Plaintiff stated that “the edits proposed by [D] efendants are not acceptable.” According to P laintiff, D efendants did not respond to this correspondence by indicating that the May 1 1 P roposal was withdrawn or that Defendants’ position had changed before June 13, 2022, when Plaintiff responded to its own email and accepted the May 11 P roposal. Pl’s. Mot. at 3. 26 Id

. at 2, Ex

. F. 27 Id

. at 4. 28 Id

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P roposal foreclosed P laintiff’s ability to accept it later

. 29 As to Plaintiff’s first argument, D efendants contend the parties’ words and actions establish that the release language was an essential, unresolved settlement term. 30 Defendants assert that on two occasions (April 28 and Ma y 20), the parties advised the Court that
settlement had not been reached because the parties were unable to agree on the
terms of the release. 31 Defendants further contend P laintiff’s argument concerning the practical and legal significance of the release carve
- outs do es not affect the materiality of th e release language to the parties

. 32 Moreover, D efendants assert the

carve
- out language ’s significan ce to P laintiff w as evidenced by its insistence that
the future claims language remain in the proposed settlement agreement. 33
18. As to Plaintiff’s second argument , D efendants contend P laintiff expressly rejected the May 11 P roposal on May 1 9 , 2022 , and P laintiff advised
D efendants and the Court that the terms of its April 28 P roposal contained P laintiff’s definitive position on settlement language. 34 Defendants contend P laintiff’s express rejection of the May 11 P roposal and subsequent statement that it only would accept the release language in the April 28 P roposal was a rejection and counteroffer that

29 Defs.’ Resp. in Opp. at 5

- 6. 30 Id

. at 5. 31 Id

. 32 Id

. at 6. 33 Id

. 34 Id

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terminated P laintiff’s power to accept the May 11 P roposal. 35 D efendants therefore
contend P laintiff’s attempt to accept the May 11 P roposal on June 13, 2022 is
unenforcea ble and no agreement exists between the parties. 36
19. Neither of Plaintiff’s arguments satisfy its burden on this Motion . First,

t he record unequivocally establishes the parties had not reached a binding settlement agreement on May 11, 2022. Plaintiff inform ed the Court on April 28, 2022 at the
Pretrial Conference that no settlement agreement had been reached as of that date

. 37 On May 11, 2022, D efendants circulated a re vised proposed settlement agreement

. That May 11 P roposal changed the scope of the release Plaintiff previously proposed.
20. On May 1 9 , 2022, in response to the May 11 P roposal, P laintiff advised
D efendants that “the edits proposed by the defendants are not acceptable to Suppi.” 38 On May 20, 2022 , P laintiff reported to the Court that the parties had not been able
to resolve their remaining disagreements , and P laintiff had provided its definitive position on settlement language. 39 A s of May 20, 2022, P laintiff’s conduct did not objectively manifest an intent to be bound by D efendants’ May 11 P roposal.

35 Id

. at 6

- 7. 36 Id

. at 7. 37 Id

. at 3 , ¶ 5. 38 Id

. at 4 , Ex

. E. 39 Id

. at 4, Ex

. F

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21. Although Plaintiff now contends the scope of the release was not a material term, this Court must consider the parties’ overt manifestations of assent, rather than their subjective intent, to determine whether they reached an a greement on all material terms. 40 The parties’ conduct during the negotiation period
demonstrated the materiality of the release to both sides. P laintiff repeatedly informed the Court that it had not reached an agreement with D efendants because
the relea se language was not resolved. T h ese representations show that the parties did not believe they had formed an enforceable agreement. Whether the scope of a release would be “material” in all cases is not an issue this Court needs to resolve. Here, the par ties’ communications among themselves and to the Court established that the scope of the release was material to them and was the single issue preventing
them from advising the Court that a settlement had been reached. Neither side indicated in May 2022 th at the scope of the release was not material.
22. Moreover, Plaintiff ’s argument in the Motion that the parties’ disagreement regarding the scope of the release was irrelevant because settled
Delaware law controlled the issue does not alter the materiality of the release to the parties or their unequivocal representations to the Court that no settlement had been
reached. Plaintiff contends the only issue left to negotiate was whether the release

40 Spacht, 2016 WL 6298836, at *2 (citing United Health All., LLC , 2013 WL 6383026, at *6).13

contained any carve out for claims arising in the future. 41 Even if P laintiff’s view of
the caselaw regarding future claims is correct, however, what matters is the parties’ objective manifestations of intent. At the time of the parties’ communications regarding the scope of the release, P laintiff continued to resist agreeing to settlement

terms that the P laintiff now contends were immaterial. This new view of the parties’ negotiations cannot revise the otherwise unambiguous record regarding P laintiff’s position and representations in May 2022.
23. As to Plaintiff’s alternative theory , P laintiff rejected the May 11
P roposal and therefore could not accept it in June 2022. It is a basic tenet of contract
law that an offer, once rejected, cannot be accepted unless renewed. 42 In P laintiff’s view, it accepted the Defendant’s May 11 P roposal on June 13 th as a mirror image acceptance. But Plaintiff’s express rejection of the May 11 P roposal on May 19 th and
later statement that it only would a ccept the release language in the April 28 P roposal was a rejection and counteroffer that terminated P laintiff’s power to accept the May
11 P roposal on June 13 th

. 24. Plaintiff nevertheless argues D efendants never formally withdrew their
offer and Plaintiff therefore retained the power to accept it

. 43 Plaintiff has not cited

41 Pl

. ’s Mot. at 2

- 3. 42 PAMI

– LEMB I Inc. v. EMB

–

NHC, L.L.C ., 857 A.2d 998, 1015 (Del. Ch. 2004) (by making a counteroffer, party rejected the initial offer and terminated its power to accept that offer); s ee also Ramone , 2006 WL 905347, at *10 (Delaware has adopted the mirror

- image rule, which requires an accepta nce to be identical to an offer). 43 Pl

. ’s Mot. at 3.14

to any caselaw requiring an offeror to formally withdraw an offer that already has been rejected. Once Plaintiff rejected the May 11 Proposal on May 1 9 th , there was no pend ing offer for Defendant to withdraw or for Plaintiff to accept. Defendants never renewed the May 11 Proposal. Defendants’ statement to the Court on May 20 th expressing a willingness to engage in another round of mediation was not an unambiguous renewal of the terms of the May 11 P roposal. In short, o n June 13 th , there was no open offer for P laintiff to accept , and Plaintiff’s attempt to do so could
not bind Defendants

. 25. For the foregoing reasons, Plaintiff has not established by a preponderance of the evidence that the parties formed a settlement agreement, and

t he P laintiff’s Motion to Enforce the Settlement Agreement therefore is DENIED

. In accordance with the Court’s order on April 28, the part ies shall schedule an in

person mediation to be held by January 20 , 2023. Counsel shall provide the Court with an update on January 23 , 2023. If the case has not resolved by that date, a new
trial date will be established. IT IS SO ORDERED.

/ s/ Abigail M. LeGrow Abigail M. LeGrow, Judge