COURT OF CHANCERY

OF THE

STATE OF DELAWARE

TAMIKA R. MONTGOMERY-REEVES

VICE CHANCELLOR

Leonard Williams Justice Center

500 N. King Street, Suite 11400

Wilmington, Delaware 19801-3734

Date Submitted: July 12, 2018

Date Decided: October 31, 2018

M. Duncan Grant, Esquire

Christopher B. Chuff, Esquire

Pepper Hamilton LLP

1313 N. Market Street, Suite 5100

Wilmington, DE 19801

Eric Lopez Schnabel, Esquire

Robert W. Mallard, Esquire

Alessandra Glorioso, Esquire

Dorsey & Whitney LLP

300 Delaware Avenue, Suite 1010

Wilmington, DE 19801

RE: Diane C. Creel v. Ecolab, Inc.

Civil Action No. 12917-VCMR

Dear Counsel:

This letter opinion addresses Defendant’s Motion for Summary Judgment 

Dismissing Count I of the Complaint. For the reasons stated below, I deny the

Motion for Summary Judgment.

I. BACKGROUND

The facts in this opinion derive from the pleadings, the parties’ submitted 

affidavits, and exhibits cited therein.1

 

1

 Ct. Ch. R. 56(c). 
Creel v. Ecolab, Inc.

C.A. No. 12917-VCMR 

October 31, 2018 

Page 2 of 15 

This action involves Diane C. Creel’s request for indemnification from 

Ecolab, Inc. (“Ecolab”), a Delaware corporation in the business of providing water, 

hygiene, and energy technologies.2

 Creel was the President, Chief Executive 

Officer, and Chair of the Board of Directors of Ecovation, Inc. (“Ecovation” or the 

“Company”), Ecolab’s predecessor.3

 Various stockholders of Ecovation sued Creel

for breaches of fiduciary duty in two underlying actions.4

 One action ended in 

settlement,

5 and the other ended when the court granted summary judgment in favor 

of Creel.6

 This motion does not turn on any of the facts in these underlying actions. 

Therefore, I spare the reader the long recitation that would be necessary to fully 

explain the various relationships and allegations. 

In this motion, Ecolab seeks summary judgment, arguing that Creel was 

obligated to, but did not, obtain its approval before agreeing to settle the underlying 

action.

7

 Three separate documents provide Creel with indemnification rights: the 

 

2

 Compl. ¶¶ 7, 110. 

3

 Id. ¶ 2. 

4

 Id. ¶ 1; id. Ex. A ¶¶ 135-36. 

5

 Id. ¶¶ 86-88; Def.’s Opening Br. 16. 

6

 Compl. ¶ 92. 

7

 Def.’s Opening Br. 31-42. 
Creel v. Ecolab, Inc.

C.A. No. 12917-VCMR 

October 31, 2018 

Page 3 of 15 

Company’s Amended and Restated Certificate of Incorporation (the “Charter”), the 

Company’s Bylaws (the “Bylaws”), and the Indemnification Agreement Ecolab 

executed when Creel joined Ecovation (the “Indemnification Agreement”).8

 Two 

documents, the Charter and the Bylaws, clearly do not require any approval of the 

settlement, and the parties do not dispute this interpretation of the documents’ 

indemnification provisions.

9

 The Indemnification Agreement clearly does require 

approval of the settlement, and the parties do not dispute this interpretation of the 

agreement.

10 Instead, the Company argues that the Indemnification Agreement 

supersedes the Charter and the Bylaws, and thus, under the terms of the 

Indemnification Agreement, Creel must have obtained Ecolab’s approval of the 

settlement to receive indemnification.11 Therefore, the deciding issue in this motion 

for summary judgment is strictly one of contract interpretation; I must determine

whether the Indemnification Agreement’s requirement for approval of the settlement 

 

8

 Compl. Ex. D, at 16-17; id. Ex. E, at 9; id. Ex. F. Ecovation was formerly known 

as AnAerobics, Inc.; the Charter and Bylaws reflect the former name. 

9

 Id. Ex. D, at 16-17; id. Ex. E, at 9; Def.’s Opening Br. 35; Pl.’s Answering Br. 25. 

10 Compl. Ex. F § 1(a); Def.’s Opening Br. 34; Pl.’s Answering Br. 25. 

11 Def.’s Opening Br. 31-42. The parties dispute whether Creel obtained Ecolab’s 

approval. Id. at 40-41; Pl.’s Answering Br. 28. 
Creel v. Ecolab, Inc.

C.A. No. 12917-VCMR 

October 31, 2018 

Page 4 of 15 

supersedes the indemnification provisions of the Charter and the Bylaws or whether

the Charter and the Bylaws instead provide independent sources of indemnification.

II. ANALYSIS

A. Standard of Review

Summary judgment will be “granted if the pleadings, depositions, answers to 

interrogatories and admissions on file, together with the affidavits, show that there 

is no genuine issue as to any material fact and that the moving party is entitled to a 

judgment as a matter of law.”12 The movant bears the initial burden of demonstrating 

that there is no question of material fact.13 When the movant carries that burden, the 

burden shifts to the nonmoving party “to present some specific, admissible evidence 

that there is a genuine issue of fact for a trial.”14 When considering a motion for 

summary judgment, this Court must view the evidence and the inferences drawn 

from the evidence in the light most favorable to the nonmoving party.15 Even so, the 

 

12 Twin Bridges Ltd. P’ship v. Draper, 2007 WL 2744609, at *8 (Del. Ch. Sept. 14, 

2007) (citing Ct. Ch. R. 56(c)). 

13 Deloitte LLP v. Flanagan, 2009 WL 5200657, at *3 (Del. Ch. Dec. 29, 2009). 

14 Id. (citing Watson v. Taylor, 829 A.2d 936 (TABLE), 2003 WL 21810822, at *2 

(Del. Aug. 4, 2003)).

15 Judah v. Del. Tr. Co., 378 A.2d 624, 632 (Del. 1977); Fike v. Ruger, 754 A.2d 254, 

260 (Del. Ch. 1999), aff’d, 752 A.2d 112 (Del. 2000). 
Creel v. Ecolab, Inc.

C.A. No. 12917-VCMR 

October 31, 2018 

Page 5 of 15 

nonmoving party may not rely on allegations or denials in the pleadings to create a 

material factual dispute.16

The dispute in this motion turns on contract interpretation. “[T]he rules that 

govern the interpretation of statutes, contracts, and other written instruments apply 

to the interpretation of corporate charters and bylaws.”17 “Delaware follows an 

objective theory of contracts, ‘which requires a court to interpret a particular 

contractual term to mean “what a reasonable person in the position of the parties 

would have thought it meant.”’”18 Delaware courts interpret the clear and 

unambiguous terms of a contract according to their plain meaning.19 If a term in a 

contract is reasonably susceptible to more than one interpretation, then that term is 

ambiguous, but “[t]he parties’ steadfast disagreement over interpretation will not, 

alone, render the contract ambiguous.”20

 

16 Ct. Ch. R. 56(e). 

17 Charney v. Am. Apparel, Inc., 2015 WL 5313769, at *6 (Del. Ch. Sept. 11, 2015) 

(alteration in original) (quoting Sassano v. CIBC World Mkts. Corp., 948 A.2d 453, 

462 (Del. Ch. 2008)). 

18 Narayanan v. Sutherland Glob. Hldgs. Inc., 2016 WL 3682617, at *11 (Del. Ch. 

July 5, 2016) (quoting Charney, 2015 WL 5313769, at *10). 

19 Id.

20 Estate of Osborn v. Kemp, 991 A.2d 1153, 1160 (Del. 2010) (citing Rhone-Poulenc 

Basic Chems. Co. v. Am. Motorists Ins. Co., 616 A.2d 1192, 1195 (Del. 1992)). 
Creel v. Ecolab, Inc.

C.A. No. 12917-VCMR 

October 31, 2018 

Page 6 of 15 

B. The Indemnification Agreement Does Not Supersede the Charter 

or the Bylaws

“Section 145(f) makes clear that the indemnification and advancement rights 

under the DGCL are not exclusive of any additional indemnification and 

advancement rights a corporation chooses to provide through a separate 

instrument.”21 The first sentence of Section 145(f) states,

The indemnification and advancement of expenses 

provided by, or granted pursuant to, the other subsections 

of this section shall not be deemed exclusive of any other 

rights to which those seeking indemnification or 

advancement of expenses may be entitled under any 

bylaw, agreement, vote of stockholders or disinterested 

directors or otherwise, both as to action in such person’s 

official capacity and as to action in another capacity while 

holding such office.

In accordance with Section 145(f), companies often provide indemnification to their 

directors and officers in their charters, bylaws, or other agreements.

Creel relies on the indemnification provisions of the Charter and the Bylaws 

as the sources of indemnification for her portion of the settlement.22 Ecovation’s 

 

21 Narayanan, 2016 WL 3682617, at *9; see also Charney, 2015 WL 5313769, at *8; 

Danenberg v. Fitracks, Inc., 2012 WL 11220, at *5 (Del. Ch. Jan. 3, 2012). 

22 Compl. ¶¶ 103-04, 110. When Ecolab acquired Ecovation, it became obligated 

under the terms of the merger agreement to provide advancement and 

indemnification to Ecovation’s former officers and directors, including Creel, to the 

same extent as those officers and directors were entitled to advancement and 

indemnification under Ecovation’s Charter, Bylaws, or any other agreement. Id.
Creel v. Ecolab, Inc.

C.A. No. 12917-VCMR 

October 31, 2018 

Page 7 of 15 

Charter provides Creel with indemnification and advancement rights “to the fullest 

extent authorized” by the General Corporation Law of Delaware:

Each person who was or is made a party or is threatened 

to be made a party to or is otherwise involved in any 

action, suit or proceeding, whether civil, criminal, 

administrative or investigative (hereinafter a 

“proceeding”), by reason of the fact that he or she is or was 

a director or officer of the Corporation . . . whether the 

basis of such proceeding is alleged action in an official 

capacity as a director, officer, employee or agent or in any 

other capacity while serving as a director, officer, 

employee or agent, shall be indemnified and held harmless 

by the Corporation to the fullest extent authorized by the 

Delaware General Corporation Law . . . against all 

expense, liability and loss (including attorneys’ fees, 

judgments, fines, ERISA excise taxes or penalties and 

amounts paid in settlement) reasonably incurred or 

suffered by the indemnitee in connection therewith . . . . 

The right to indemnification conferred by this Article shall 

be a contract right and shall include the right to be paid by 

 

Ex. C § 7.5(a) (“[Ecolab] and [Empire Acquisition, Inc.] jointly and severally agree 

that all rights to indemnification and advancement of expenses for acts or omissions 

occurring prior to the [merger] (including acts or omissions in connection with this 

Agreement and the consummation of the transactions contemplated hereby) now 

existing in favor of the Company’s current and former directors and officers (each 

a ‘D&O Indemnified Party’) as provided in the Company’s Governing Documents, 

and in any indemnification agreements with the D&O Indemnified Parties, will 

survive the Merger and will thereafter continue in full force and effect in accordance 

with their terms. [Ecolab] and [Empire Acquisition, Inc.] jointly and severally will 

advance expenses to and indemnify the D&O Indemnified Parties to the same extent 

as the Indemnified Parties currently are entitled to advancement of expenses and 

indemnification.”). 
Creel v. Ecolab, Inc.

C.A. No. 12917-VCMR 

October 31, 2018 

Page 8 of 15 

the Corporation the expenses incurred in defending any 

such proceeding in advance of its final disposition . . . .23 

The Charter also contains a non-exclusivity provision: “The rights to 

indemnification and to the advancement of expenses conferred by this Article shall 

not be exclusive of any other right which any person may have or hereafter acquire 

under any provision of any statute, [the Charter], [the Bylaws], any agreement, . . . 

or otherwise.”24

Similarly, Evocation’s Bylaws provide Creel with indemnification and 

advancement rights “[t]o the fullest extent authorized or permitted” by the General 

Corporation Law of Delaware:

To the fullest extent authorized or permitted by the 

Delaware General Corporation Law, as amended from 

time to time, the Corporation shall indemnify any person 

made, or threatened to be made, a party in any civil or 

criminal action or proceeding by reason of the fact that 

he . . . is or was a Director or corporate officer of the 

Corporation . . . . As used in this Article, the term 

“indemnify”, in all its forms, shall be deemed to include 

the advancement of legal and other expenses incurred in 

defending a civil or criminal action or proceeding.25

 

23 Id. Ex. D, at 16-17. 

24 Id. at 17-18. 

25 Compl. Ex. E art. V, § 1, at 9. 
Creel v. Ecolab, Inc.

C.A. No. 12917-VCMR 

October 31, 2018 

Page 9 of 15 

Like the Charter, the Bylaws also include a non-exclusivity provision: “The 

provisions of this Section 1 shall not be exclusive of any other rights to which any 

such person may be entitled, whether contained in the Corporation’s [Charter], [the 

Bylaws] or any agreement or resolution providing for indemnification and permitted 

by law.”26

Creel does not rely on the Indemnification Agreement as a source of 

indemnification,27 but Ecolab asserts that the Indemnification Agreement defines the 

terms of Creel’s right to indemnification.28 The Indemnification Agreement differs 

from the Charter and Bylaws in its definition of covered expenses. The Charter 

provides indemnification “against all expense, liability and loss (including 

attorneys’ fees, judgments, fines, ERISA excise taxes or penalties and amounts paid 

in settlement).”29 The Bylaws do not contain any definition of covered expenses.

30 

The Indemnification Agreement expressly provides indemnification against 

“reasonable attorneys’ fees, judgments, fines and amounts paid in settlement (if such 

 

26 Id. 

27 See Compl. ¶¶ 103-04, 110.

28 Def.’s Opening Br. 33. 

29 Compl. Ex. D, at 16. 

30 See id. Ex. E art. V, at 9-10. 
Creel v. Ecolab, Inc.

C.A. No. 12917-VCMR 

October 31, 2018 

Page 10 of 15 

settlement is approved in advance by the Company),” which are defined collectively 

as “Expenses.”31

Ecolab acknowledges that the Charter and the Bylaws do not require approval 

of the settlement to trigger indemnification.

32 It argues, however, that where a later 

contract between parties covers the same subject matter as an earlier contract, the 

new contract supersedes and controls whenever the two agreements conflict.33 

Ecolab asserts that the Indemnification Agreement supersedes the indemnification 

provisions of the Charter and the Bylaws because the Indemnification Agreement’s 

definition of Expenses requires approval of the settlement.34 

The Indemnification Agreement contains several clauses that refer to the 

Charter and the Bylaws. For example, the Indemnification Agreement refers to the 

Charter and the Bylaws in its non-exclusivity clause:

The right to indemnification and advancement of 

Expenses provided by this Agreement shall not be 

exclusive of any other rights to which Indemnitee may be 

 

31 Id. Ex. F § 1(a), at 9-10. 

32 Def.’s Opening Br. 35. 

33 Id. at 32-33. 

34 Id. at 31-39. 
Creel v. Ecolab, Inc.

C.A. No. 12917-VCMR 

October 31, 2018 

Page 11 of 15 

entitled under the [Charter] or Bylaws . . . of the 

Company . . . ; 

PROVIDED, HOWEVER, that to the extent Indemnitee 

otherwise would have any greater right to indemnification 

and/or advancement of Expenses under any provision of 

the Charter or the Bylaws of the Company, Indemnitee 

shall be deemed to have such greater right pursuant to this 

Agreement; and,

PROVIDED, FURTHER, that to the extent that any 

change is made to the Delaware law . . . , the Charter 

and/or the Bylaws of the Company that permits any greater 

right to indemnification and/or advancement of Expenses 

than that provided under this Agreement as of the date 

hereof, Indemnitee shall be deemed to have such greater 

right pursuant to this Agreement.35

The first clause refers to “any other rights” in the Charter or Bylaws.36 This 

language implicates rights broader than the “right to indemnification and 

advancement of Expenses” only.37 Interpreting the plain language of the 

Indemnification Agreement, the first clause explicitly allows for broader 

indemnification rights in the Charter or Bylaws and does not create a conflict. It 

includes rights to indemnification and advancement of non-Expenses or expenses 

 

35 Id. § 16(a) (emphases and formatting added). 

36 Id.

37 Id.
Creel v. Ecolab, Inc.

C.A. No. 12917-VCMR 

October 31, 2018 

Page 12 of 15 

covered by the Charter or Bylaws but not by the Indemnification Agreement. The 

second clause clarifies that the Indemnification Agreement does not limit any 

broader rights applicable to Expenses. These two provisions have different 

meanings. The first addresses rights other than Expenses, and the second directly 

addresses rights to Expenses. Neither is superfluous.

Additionally, the recitals include references to the Charter and the Bylaws that 

support my interpretation of the Indemnification Agreement. Although 

“‘[g]enerally, recitals are not a necessary part of a contract,’ . . . they can be useful 

to explain the intended meaning of other terms.”38 Here, the recitals state the 

purposes of the Indemnification Agreement:

WHEREAS, the Charter . . . and Bylaws . . . of the 

Company provide for indemnification by the Company of 

its directors and officers as provided therein, and the 

Indemnitee, at the Company’s request, has agreed to serve

as a director, officer, or employee of the Company partly 

in reliance on such provision; and

WHEREAS, to provide the Indemnitee with additional 

contractual assurance of protection against personal 

liability in connection with certain proceedings described 

below, the Company and Indemnitee desire to enter into 

this Agreement; and

 

38 Utilisave, LLC v. Miele, 2015 WL 5458960, at *7 (Del. Ch. Sept. 17, 2015) (quoting 

New Castle Cty. v. Crescenzo, 1985 WL 21130, at *3 (Del. Ch. Feb. 11, 1985)). 
Creel v. Ecolab, Inc.

C.A. No. 12917-VCMR 

October 31, 2018 

Page 13 of 15 

WHEREAS, Section 145 of the Delaware General 

Corporation Law . . . expressly recognizes that the 

indemnification provisions therein are not exclusive of any 

other rights to which a person seeking indemnification 

may be entitled under the Charter or Bylaws of the 

Company . . . , and this Agreement is being entered into

pursuant to and in furtherance of the Charter and Bylaws

of the Company, as permitted by the DGCL and as 

authorized by the Charter and the Bylaws; and 

WHEREAS, in order to induce the Indemnitee to continue 

to serve as a director, officer and/or employee of the 

Company and in consideration of Indemnitee’s so serving, 

the Company desires to indemnify the Indemnitee and to 

make arrangements pursuant to which the Indemnitee may 

be advanced or reimbursed expenses incurred by the 

Indemnitee in certain proceedings described below, 

according to the terms and conditions set forth below.39

None of the recitals indicates any contradiction between the Indemnification 

Agreement and the Charter or Bylaws. They indicate precisely the opposite. First, 

the recitals acknowledge that Creel agreed to serve as a director and officer of the 

Company in reliance on the indemnification provisions—not of the Indemnification 

Agreement—but of the Charter and the Bylaws.40 The terms of the Charter and the 

Bylaws provide for indemnification of the settlement without Ecolab’s approval.41 

 

39 Compl. Ex. F, at 1 (emphases added). 

40 Id.

41 See Compl. Ex. D § 1(a), at 16; id. Ex. E art. V, § 1, at 9. 
Creel v. Ecolab, Inc.

C.A. No. 12917-VCMR 

October 31, 2018 

Page 14 of 15 

Second, the recitals indicate that the Indemnification Agreement provides 

“additional contractual assurance” “against personal liability” beyond those 

provided in the Charter and Bylaws.42 Third, the recitals also acknowledge that 

Section 145 allows for multiple sources of indemnification and that the 

Indemnification Agreement is “pursuant to and in furtherance of the Charter and 

Bylaws.”43 It is inconsistent with the language in the recitals to suggest that the 

Indemnification Agreement limits, alters, or supersedes the Charter or the Bylaws. 

If anything, the recitals indicate that the Indemnification Agreement is an expansion 

of Creel’s rights under the Charter and the Bylaws.

The plain language of the Indemnification Agreement does not support 

Ecolab’s argument. To the contrary, the plain language indicates no intent to alter, 

amend, limit, or supersede the Charter or Bylaws. Sophisticated parties drafted and 

entered into the Indemnification Agreement. If the parties had intended to limit the 

Charter or Bylaws, they could have and should have done so explicitly. The 

Indemnification Agreement does not limit Creel’s right to indemnification under the 

 

42 Id. Ex. F, at 1. 

43 Id.
Creel v. Ecolab, Inc.

C.A. No. 12917-VCMR 

October 31, 2018 

Page 15 of 15 

Charter or Bylaws. Thus, it does not require approval under the indemnification 

provisions of the Charter and Bylaws.44

III. CONCLUSION

For the foregoing reasons, I DENY Defendant’s Motion for Summary 

Judgment Dismissing Count I of the Complaint. 

IT IS SO ORDERED. 

Sincerely,

/s/Tamika Montgomery-Reeves

Vice Chancellor

TMR/jp

 

44 Because the Charter indemnifies against amounts paid in settlement (without an 

approval requirement) and Creel identifies the Charter as a source of 

indemnification (Compl. ¶ 103.), Ecolab’s second argument, that Creel did not 

obtain approval, is moot.