MarkDutchCo 1 B.V. v. Zeta Interactive Corp.

Filing 50

MEMORANDUM OPINION. Signed by Judge Colm F. Connolly on 7/31/2020. (fms)

Case 1:17-cv-01641-CFC Document 50 Filed 07/31/20 Page 1 of 20 PageID #: 1097

IN THE UNITED STATES DISTRICT COURT
FOR THE DISTRICT OF DELAWARE
MARKDUTCHCO 1 B.V.,
Plaintiff,

v.

Civil Action No. 17-1641-CFC

ZETA INTERACTIVE CORP.,
Defendant.

ZETA INTERACTIVE CORP.,
Third-Party Plaintiff,
V.

Civil Action No. 17-1641-CFC

MARKMIDCO s.AR.L,
Third-Party Defendant.

William M. Lafferty, John P. DiTomo, Zi-Xiang Shen, MORRIS, NICHOLS,
ARSHT & TUNNELL LLP, Wilmington, Delaware; Stephen M. Juris, Alexandra
Verdi, FRIED, FRANK, HARRIS, SHRIVER & JACOBSON LLP, New York,
New York

Counsel for Plaintiff
Patricia A. Winston, MORRIS JAMES LLP, Wilmington, Delaware; John Du
Wors, Nathan Durrance, NEWMAN DU WORS DURRANCE LLP, Seattle,
Washington

Counsel for Defendant

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William M. Lafferty, John P. DiTomo, Zi-Xiang Shen, MORRIS, NICHOLS,
ARSHT & TUNNELL LLP, Wilmington, Delaware; Stephen M. Juris, Alexandra
Verdi, FRIED, FRANK, HARRIS, SHRIVER & JACOBSON LLP, New York,
New York

Counsel for Third-Party Defendant

MEMORANDUM OPINION

July 31, 2020
Wilmington, Delaware

11

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COLM F. CONNOLLY
UNITED STATES DISTRICT JUDGE

Plaintiff MarkDutchCo 1 B.V. filed this lawsuit to compel Defendant Zeta
Interactive Corp. to pay a $3.45 million Holdback Amount MarkDutchCo alleges
Zeta was required to pay under the terms of an Interest Purchase Agreement.
D.I. 1. Zeta filed counterclaims for breach of the Interest Purchase Agreement and
breach of a Resource Services Agreement. D.I. 26. Zeta also filed third-party
claims against Third-Party Defendant Markmidco S.ar. l that are identical to its
counterclaims. D.I. 26.
MarkDutchCo has moved for judgment on the pleadings or, in the
alternative, summary judgment. D.I. 33. MarkDutchCo and Markmidco have
moved pursuant to Federal Rule of Civil Procedure 12(b)(6) and the doctrine of
forum non conveniens to dismiss respectively the counterclaims and third-party

claims. D.I. 29; D.I. 43. Markmidco has also moved pursuant to Rule 12(b)(5) to
dismiss the third-party claims for insufficient service of process. MarkDutchCo
and Markmidco also seek by their motions an award of fees and costs. D.I. 33 at 1;
D.I. D.I. 32 at 20; D.I. 45 at 12.

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I will grant MarkDutcho' s motion for summary judgment. 1 I will also grant
MarkDutchCo and Markmidco's motions to dismiss pursuant to Rule 12(b)(6) for
failure to state a claim. I therefore need not and do not address the issues offorum
non conveniens and sufficiency of process raised in the motions. I will deny the

three motions insofar as they seek an award of fees and costs.

I.

BACKGROUND
The following facts are undisputed. On August 28, 2015, Zeta entered into

an Interest Purchase Agreement (the Purchase Agreement) with Markmidco. D.I.
35 ,r 1; D.I. 39 ,r I. Pursuant to the Purchase Agreement, Zeta acquired
Markmidco's interest in a customer relationship management business (the CRM
Business), which consisted of several companies that provided to retailers email
and text message marketing, database management, and related services. D.I. 35 ,r
2; D.I. 39 ,r 2. Zeta agreed to pay, among other things, $23,000,000 in cash for the
CRM Business. D.I. 35 ,r 3; D.I. 39 ,r 3. The Purchase Agreement permitted Zeta
to hold back at the closing of the transaction and to retain for up to 18 months and
three business days $3,450,000 of the cash payment (the Holdback Amount). D.I.

1

Federal Rule of Civil Procedure 12(d) states that "[i]f, on a motion under Rule
12(b)(6) or 12(c), matters outside the pleadings are presented to and not excluded
by the court, the motion must be treated as one for summary judgment under Rule
56." MarkDutchCo and Zeta each submitted a concise statement of facts, see D.I.
35; D.I. 39, and in so doing presented matters to the Court outside the pleadings.
Accordingly, I have treated MarkDutchCo' s motion for judgment on the pleadings
as a motion for summary judgment.
2

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35 ,r 4; D.I. 39 ,r 4. Pursuant to§ 6(b)(v) of the Purchase Agreement and a
subsequent assignment of Markmidco' s rights under the Purchase Agreement to
MarkDutchCo, when the eighteen-month-and-three-business-day period expired,
Zeta was obligated to pay MarkDutchCo "an amount equal to the Holdback
Amount[] less the Retained Holdback Amounts." D.I. 1, Ex.• A§ 6(b)(v). The
Purchase Agreement defined "Retained Holdback Amounts" as the amount of
indemnified losses "that are finally determined." D.I. 1, Ex. A § 6(b )(v).
Under the Purchase Agreement, there were three ways for Zeta to obtain a
final determination of its indemnified losses:
(i)

by "reach[ing] an agreement in writing" with the
other parties to the dispute that created the losses;

(ii)

by getting "a final and non-appealable order" from
"a court of competent jurisdiction[;]" or

(iii)

by getting "a final non-appealable determination"
from "an arbitration or like panel [. ]"

D.I. 1, Ex. A at§ 6(b)(v).
The Purchase Agreement closed on November 2, 2015. D.I. 35 ,r 5; D.I. 39

,r 5.

At closing, Zeta held back the $3,450,000 Holdback Amount. D.I. 35 ,r 5;

D.I. 39 ,r 5. Pursuant to a side letter agreement between Markmidco,
MarkDutchCo, and Zeta, also dated November 2, 2015 (the Side Letter),
Markmidco assigned its interests in the Purchase Agreement to MarkDutchCo.
D.I. 35 ,I 6; D.I. 39 ,r 6.
3

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Because the Purchase Agreement closed on November 2, 2015, the eighteenmonth-and-three business day period expired on May 5, 201 7. At no time prior to
the May 5, 2017 deadline did Zeta obtain a "final determination" of any claims
against MarkDutchCo or Markmidco. D.I. 35 ,r 13; D.I. 39 ,r 13.
On May 1, 201 7, Zeta informed MarkDutchCo that it planned on
withholding the entirety of the Holdback Amount because of various losses it
alleged it had incurred. D.I. 30-1, Ex. 6. Zeta has refused to this date to pay any
portion of the Holdback Amount to MarkDutchCo.
II.

LEGAL STANDARDS

A.

Summary Judgment

A court must grant summary judgment "if the movant shows that there is no
genuine dispute as to any material fact and the movant is entitled to judgment as a
matter of law." Fed. R. Civ. P. 56(a). The moving party bears the burden of
demonstrating the absence of any genuine issues of material fact. Celotex Corp. v.

Catrett, 477 U.S. 317,323 (1986). If the burden of persuasion at trial would be on
the non-moving party, then the moving party may satisfy its burden of production
by pointing to an absence of evidence supporting the non-moving party's case,
after which the burden of production then shifts to the non-movant to demonstrate
the existence of a genuine issue for trial. Matsushita Elec. Indus. Co., Ltd. v.

4

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Zenith Radio Corp., 475 U.S. 574, 586-87 (1986); Williams v. Borough of West
Chester, Pa., 891 F.2d 458, 460-61 (3d Cir. 1989).

Material facts are those "that could affect the outcome" of the
proceeding. Lamont v. New Jers_ey, 637 F.3d 177, 181 (3d Cir. 2011). "[A]
dispute about a material fact is genuine if the evidence is sufficient to permit a
reasonable jury to return a verdict for the nonmoving party." Id. (internal
quotation marks omitted). A non-moving party asserting that a fact is genuinely
disputed must support such an assertion by: "(A) citing to particular parts of
materials in the record, including depositions, documents, electronically stored
information, affidavits or declarations, stipulations, ... admissions, interrogatory
answers, or other materials; or (B) showing that the materials cited [by the
opposing party] do not establish the absence ... of a genuine dispute ...." Fed. R.
Civ. P. 56(c)(l). The non-moving party's evidence "must amount to more than a
scintilla, but may amount to less (in the evaluation of the court) than a
preponderance." Williams, 891 F.2d at 460-61.
The court must view the evidence in the light most favorable to the nonmoving party and draw all reasonable inferences in that party's favor. Wishkin v.
Potter, 4 76 F .3d 180, 184 (3d Cir. 2007). "[T]he facts asserted by the nonmoving

party, if supported by affidavits or other evidentiary material, must be regarded as
true ...." Aman v. Cort Furniture Rental Corp., 85 F.3d 1074, 1080 (3d Cir.

5

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1996). If "there is any evidence in the record from any source from which a
reasonable inference in the [nonmoving party's] favor may be drawn, the moving
party simply cannot obtain a summary judgment." Id.

B.

Motion to Dismiss

To state a claim upon which relief can be granted a complaint must contain
"a short and plain statement of the claim showing that the pleader is entitled to
relief." Fed. R. Civ. P. 8(a)(2). Detailed factual allegations are not required, but
the complaint must set forth enough factual matter, accepted as true, to "state a
claim to relief that is plausible on its face." Bell At/. Corp. v. Twombly, 550 U.S.
544, 570 (2007). A claim is facially plausible when the factual content allows the
court to draw the reasonable inference that the defendant is liable for the
misconduct alleged. Ashcroft v. Iqbal, 556 U.S. 662, 678 (2009). "Threadbare
recitals of the elements of a cause of action, supported by mere conclusory
statements, do not suffice." Id.
When considering Rule l 2(b)( 6) motions to dismiss, the court must accept
as true all factual allegations in the complaint and view them in the light most
favorable to plaintiffs. Umland v. PLANCO Fin. Servs., 542 F.3d 59, 64 (3d Cir.
2008). The court, however, is "not bound to accept as true a legal conclusion
couched as a factual allegation." Papasan v. Allain, 478 U.S. 265, 286 (1986)
(citations omitted).
6

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III.

ANALYSIS
A.

MarkDutchCo's Motion for Summary Judgment

On May 5, 2017, Zeta was obligated to pay MarkDutchCo "an amount equal
to the Holdback Amount[] less the Retained Holdback Amounts." D.I. 1, Ex. A
§ 6(b)(v). The Purchase Agreement defined "Retained Holdback Amounts" as the
amount of indemnified losses "that are finally determined." D.I. 1, Ex. A§
6(b)(v). There is no dispute that Zeta did not obtain a final determination of its
indemnified losses prior to May 5, 2017. Thus, under the plain language of the
Purchase Agreement, Zeta was obligated to pay MarkDutchCo the entirety of the
Holdback Amount. There is no dispute that Zeta did not pay MarkDutchCo the
Holdback Amount. Therefore, I find that Zeta breached the Purchase Agreement.
Zeta argues that under§ 6(a) it was only required to provide notice to
MarkDutchCo that it had an indemnification claim prior to the eighteen-month
deadline and that because it sent MarkDutchCo a claim notice on May 1, 2017, it
had the right to retain the Holdback Amount. Under Delaware law, however,
" [s]pecific language in a contract controls over general language, and where
specific and general provisions conflict, the specific provision ordinarily qualifies
the meaning of the general one." DCV Holdings, Inc. v. ConAgra, Inc., 889 A.2d
954,961 (Del. 2005) (citation omitted). In this case,§ 6(a) of the Purchase
Agreement created a contractual 18-month time bar for claims under the Purchase
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Agreement and stated that claims under§ 6(a) "shall survive beyond the applicable
date specified herein with respect to any claim for indemnification under this
Section 6(a) ... in the event a Claim Notice with respect to such claim has been
delivered to the applicable Indemnitor on or prior to the Expiration Date." D.I. 1,
Ex. A§ 6(a) (emphasis in original). But§ 6(b)(v) addresses the more specific
circumstance of the Holdback Amount and the requirements for retaining the
Holdback Amount. Thus, under§ 6(a), Zeta's claim notice preserved the claims
for indemnification included in the claim notice. But under§ 6(b)(v) the claim
notice was not sufficient to enable Zeta to retain the Holdback Amount.
Zeta argues that summary judgment is inappropriate because the language of
the Purchase Agreement is susceptible to different interpretations and a jury should
decide the meaning of the contested portions of the Purchase Agreement. But just
because Zeta has argued for a different interpretation of the contract than
MarkDutchCo has does not mean that Zeta's interpretation is reasonable or the
contract is ambiguous. See Rhone-Poulenc Basic Chems. Co. v. Am. Motorists Ins.

Co., 616 A.2d 1192, 1196 (Del. 1992) ("A contract is not rendered ambiguous
simply because the parties do not agree upon its proper construction."). The plain
language of§ 6(b)( v) supports MarkDutchCo' s interpretation of the Purchase
Agreement:
Within three (3) Business Days after the eighteen ( 18)
month anniversary of the Closing Date, Buyer shall pay
8

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to Seller, by wire transfer of immediately available funds
to an account or accounts designated by Seller, an
amount equal to the Holdback Amount, less the Retained
Holdback Amounts.
D.I. 1, Ex. A§ 6(b)(v) (emphasis in original). The "shall pay" in§ 6(b)(v) clearly
indicates that payment of the Holdback Amount was not discretionary and needed
to be made on May 5, 201 7. Section 6(b )(v) also makes clear that the only portion
of the Holdback Amount that Zeta did not have to pay MarkDutchCo on May 5,
2017 was the "Retained Holdback Amounts," which had to be finally determined.
The Purchase Agreement is not ambiguous; MarkDutchCo' s interpretation of
§ 6(a) and § 6(b )(v) is correct.
Finally, Zeta argues that it would be absurd to read the Purchase Agreement
as forcing Zeta to get a final determination on claims before it could retain any
portion of the Holdback Amount. But it is not absurd to read the Purchase
Agreement as having different requirements for retaining part of the purchase price
than for making other claims under the Purchase Agreement.

B.

Mark.DutchCo and Markmidco's Motions to Dismiss2

Zeta's first set of claims allege breaches of the Resource Services
Agreement. See, e.g., D.I. 26, Counterclaims/Third Party Claims ,I 18. Neither

2

Zeta's Counterclaims against MarkDutchCo and Third-Party Claims against
Markmidco are identical. See, D.I. 26, Counterclaims/Third Party. I will,
therefore, analyze those claims together.
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MarkDutchCo nor Markrnidco, however, were parties to the Resource Services
Agreement, and the Resource Services Agreement only imposed duties on parties
to the agreement. See D.I. 30-1, Ex. 5 at 1. Accordingly, I will dismiss Zeta's
claims for breaches of the Resource Services Agreement. 3
Zeta's second set of claims allege that MarkDutchCo and Markmidco
breached§ 3(a)(ii)(A) of the Purchase Agreement, titled "Organization and
Existence," which provides:
CRM Holdco is a Delaware limited liability company duly
organized, validly existing, and in good standing under the
laws of Delaware. e-Dialog Singapore Private Ltd. is a
Singapore limited company duly organized, validly
existing, and in good standing under the laws of
Singapore. e-Dialog UK Limited is a United Kingdom
limited company duly organized, validly existing, and in
good standing under the laws of the United Kingdom.
Enterprise Marketing Solutions s.r.o is a Czech Republic
limited company duly organized, validly existing, and in
good standing under the laws of the Czech Republic. At
the Closing, each of the Companies will have all requisite
corporate power and authority to own, lease and operate
its properties and assets (including the CRM Assets) and
to carry on the CRM Business as currently conducted.
3

Markmidco argued in the alternative that Zeta's third-party claims should be
dismissed under the forum non conveniens doctrine because the Resources
Services Agreement has a forum selection clause that requires any claims related to
the Resource Services Agreement be brought in England. See D.I. 45 at 6.
Because Markmidco was not a party to the Resource Services Agreement, it cannot
invoke the Resource Services Agreement's forum selection clause. In any event,
Zeta appears to have abandoned its Resource Services Agreement claims in its
answering brief. See D.I. 46 at 15 ("Zeta brings this action under the [Interest
Purchase Agreement] and therefore is not bound by the [Resource Services
Agreement's] dispute resolution provisions or forum selection.")
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Each of the Companies is or as of the Closing will be duly
qualified or licensed to transact business and is in good
standing in each jurisdiction in which the properties and
assets (including the CRM Assets) owned, leased or
operated by such company or the nature of the CRM
Business conducted by such company makes such
qualification necessary, except as would not, individually
or in the aggregate, reasonably be expected to have a
material adverse effect. Seller has made available to Buyer
true, complete and correct copies of the certificate of
incorporation and bylaws (or comparable organizational
and governing documents) of each of the Companies and
the certificates, each as amended to the date of this
Agreement, and each as so made available is in full force
and effect on the date of this Agreement.
D.I. 1, Ex. A§ 3(a)(ii)(A). Zeta's allegation is that e-Dialog Singapore Private Ltd
and e-Dialog UK Limited (the Supplier Entities) were not "in good standing"
under the laws of their respective countries at the time the Purchase Agreement
was signed. See D.I. 26, Counterclaims/Third Party Claims ,r 17. Zeta alleges that
the Supplier Entities were not "in good standing" within the meaning of§
3(a)(ii)(A) because (1) "the Supplier Entities failed to comply with privacy and
data laws in Singapore and the Personal Data Protection Act," D.I. 26,
Counterclaims/Third Party Claims ,r 17; (2) "the Supplier Entities failed to provide
any invoices to Zeta and failed to adjust the payments Zeta made pursuant to the
Estimate," id.

,r 20; and (3) "the Supplier Entities regularly misclassified

employees as independent contractors," Id.

11

,r 23.

None of these allegations,

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however, amounts to the Supplier Entitles not being "duly organized, validly
existing, and in good standing under the laws of' their respective countries.
"The principles governing contract interpretation are well settled. Contracts
must be construed as a whole, to give effect to the intentions of the parties." Nw.

Nat. Ins. Co. v. Esmark, Inc., 672 A.2d 41, 43 (Del. 1996) (citations omitted). The
context of the phrase "duly organized, validly existing, and in good standing"
makes it clear that "in good standing" refers to whether the Supplier Entities exist
and can do business, not whether they are perfectly compliant with all applicable
law. The heading of the section, "Organization and Existence," is further evidence
that "in good standing" refers to whether these entities exist and can do business.
This reading is also confirmed by other sections of the Purchase Agreement.
Section 6(a) refers to the first three sentences of§ 3(a)(ii)(A) as "Fundamental
Representations"-a description that better fits an assurance that the Supplier
Entities exist and can do business than a guarantee that the Supplier Entities are in
perfect compliance with all applicable law. D.I. 1, Ex. A§ 6(a). And§ 3(a)(ii)(F),
titled "Compliance with Laws; Sufficiency of Permits[,]" addresses the Supplier
Entities' compliance with law applicable to them. Id. at§ 3(a)(ii)(F). Reading "in
good standing" to include compliance with law would render § 3(a)(ii)(F)
surplusage and, therefore, that reading is disfavored. See Veloric v. J.G.

Wentworth, Inc., No. CIV.A. 9051-CB, 2014 WL 4639217, at *9 (Del. Ch. Sept.
12

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18, 2014) ("[Courts] should avoid interpreting a term in an unreasonable way that
would yield an absurd result or that would render other contractual language
superfluous."). Finally, Delaware courts have interpreted "in good standing" in
similar contracts to mean "an entity qualified to do business ...." See Eni

Holdings, LLCv. KBR Grp. Holdings, LLC, No. CV 8075-VCG, 2013 WL
6186326, at *23 (Del. Ch. Nov. 27, 2013). In short, "in good standing" refers to
whether the Supplier Entities exist and can do business in their respective
jurisdictions, and Zeta has not alleged that the Supplier Entities do not exist or are
prohibited from doing business in their respective jurisdictions.
Zeta's third set of claims allege that the Supplier Entities "regularly
misclassified employees as independent contractors" and that doing so is a breach
of§ 3(a)(ii)(K)(3) of the Purchase Agreement. The representations in
§ 3(a)(ii)(K)(3) are subject to the eighteen-month expiration of representations and
warranties the parties agreed to in§ 6(a). See D.I. 1, Ex. A§ 6(a). The parties
entered into the Purchase Agreement on August 28, 2015. The parties closed on
the Purchase Agreement on November 2, 2015. Zeta's ability to bring claims
under§ 3(a)(ii)(K)(3) ended eighteen months later on May 2, 2017. The first time
Zeta alleged that the Supplier Entities misclassified their employees was when Zeta
filed its Answer on December 18, 2019. Because the representations in §

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3(a)(ii)(K)(3) expired two and a half years before Zeta brought these claims, Zeta
cannot allege a breach of contract pursuant to§ 3(a)(ii)(K)(3).
Zeta argues that it preserved this claim by providing MarkDutchCo with an
"indemnification notice before the time bar" and, therefore, under § 6(b)(iv)(A) of
the Purchase Agreement Zeta has preserved its claim that the Supplier Entities
misclassified their employees. See D.I. 36 at 8. Section 6(b)(iv)(A) sets out three
requirements for a proper claim notice under the Purchase Agreement:
[T]he party electing to seek indemnity on behalf of such
Indemnified Person shall promptly transmit to the
Indemnitor a written notice ("Claim Notice") (i) notifying
such Indemnitor of such Indemnified Claim and
requesting indemnity on behalf of such Indemnified
Person with respect to such Indemnified Claim under
Section 6{b){i) or 6{b)(ii). as the case may be, (ii) setting
forth the full name, address for all notices and the
authorized representatives of such Indemnified Person
with respect to such Indemnified Claim, and (iii)
describing in reasonable detail the nature of the
Indemnified Claim, including a copy of all papers served
with respect to such Indemnified Claim (if any) and setting
forth a good faith, non-binding, preliminary estimate of
the aggregate dollar amount of actual and potential
Losses that have arisen or may arise pursuant to the
Indemnified Claim.
D.I. 1, Ex. A§ 6(b)(iv)(A) (underline in original; italics added). Although Zeta's
claim notice went into some detail regarding four claims for indemnification, the
claim notice says nothing about any entity misclassifying employees. See D.I. 30-

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1, Ex. 6. Thus, Zeta's claim notice does not "describe in reasonable detail the
nature of' this claim and does not meet the requirements of§ 6(b)(iv)(A).
In the alternative, Zeta argues that its claim that the Supplier Entities
misclassified their employees is unaffected by Zeta's "failure to strictly follow
formal requirements of the claim notice" because under§ 6(b)(iv)(A) "'[f]ailure to
provide such Claim Notice promptly shall not affect the right of the Indemnified
Person to indemnification hereunder except to the extent the Indemnitor is
materially prejudiced by such failure."' D.I. 36 at 8 (quoting the Purchase
Agreement at§ 6(b)(iv)(A)). But MarkDutchCo and Markmidco have been
materially prejudiced by Zeta's failure to notify them of the nature of Zeta's claims
before now. The time bar for Zeta's claims under the Purchase Agreement was
May 5, 2017. The first time Zeta alleged that the Supplier Entities misclassified
their employees was over two and a half years later. The parties bargained for and
agreed to this contractual time bar. For the time bar to have any content, two and a
half years late must be too late to bring these claims. Holding otherwise would
deprive MarkDutchCo and Markmidco of the benefit of their bargain with Zeta. I
will, therefore, uphold the contractual time bar, and I will dismiss Zeta's claim for
breach of§ 3(a)(ii)(K)(3) of the Purchase Agreement.

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C.

MarkDutchCo and Markmidco's Requests for Fees and Costs

Both MarkDutchCo and Markmidco have requested an award of fees and
costs under § 6(b )(i) of the Purchase Agreement. See D.I. 32 at 18-20; D.I. 45 at
12. In § 6(b)(i) Zeta agreed to "indemnify, defend and hold harmless Seller ...
from and against all Liabilities incurred by [Seller] arising out of or relating to: (A)
any breach of any representation or warranty made by [Zeta] in this Agreement and
(B) any breach of any agreement of [Zeta] contained in this Agreement." D.I. 1,
Ex. A § 6(b )(i). But § 6(b)(i) is subject to the limitations of§ 6(b)(iii), which
provides:
Notwithstanding anything in this Agreement to the
contrary, except in the case of fraud and/or any breach or
inaccuracy in any Fundamental Representation, Seller
shall not be obligated to indemnify, defend and hold
harmless, advance, pay or reimburse the Buyer
Indemnitees pursuant to Section 6(b)(ii) and Buyer shall
not be obligated to indemnify, hold harmless, advance, pay
or reimburse the Seller Indemnitees pursuant to Section
6(b )(i), in each case, for any Losses {x) if the aggregate
amount of Losses when taken together with all other
Losses arising out of the same facts and circumstances, is
less than $100,000 {each such Claim, a "De Minimis
Claim") or (y) unless and until the aggregate amount of
Losses {not including any De Minimis Claims) that would
otherwise be payable under Section 6{b)(i) and 6{b)(ii) {as
the case may be) but for this Section 6{b)(iii) equals or
exceeds $500,000 {the "Deductible"), in which case the
applicable Indemnitor shall only be required to indemnify,
hold harmless, advance, pay or reimburse the Buyer
Indemnitees or Seller Indemnitees, as appropriate, for only
such Losses in excess of the Deductible.
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D.I. 1, Ex. A § 6(b )(iii) (emphasis added). Neither Mark.DutchCo nor Markmidco
has attempted to quantify their losses from litigating Zeta's claims. Thus, I have
no basis to determine that MarkDutchCo or Markmidco' s losses meet the
requirements of§ 6(b)(iii) and do not find that Zeta must indemnify MarkDutchCo
or Markmidco under the Purchase Agreement.
Alternatively, MarkDutchCo and Markmidco argue that Zeta should cover
their attorneys' fees because "Zeta expressly agreed in the Side Letter that it would
indemnify and hold Plaintiff and its Affiliates harmless for any and all Liabilities
arising out of, relating to, or caused by the eDialog entities" and "Zeta's own
pleadings repeatedly reference the eDialog Suppliers' alleged violations of RSA ..
. ." D.I. 32 at 19.
The Side Letter provided that
from and after the Closing, Seller and its Affiliates shall
bear no Liability arising out of, relating to or caused by the
Retained eDialog Entities (including, without limitation,
and for the avoidance of doubt, any operations of the
Retained eDialog Entities or assets, Contracts or
employees of the Retained eDialog Entities) and Buyer
shall indemnify and hold harmless Seller and its Affiliates
(other than the Retained eDialog Entities) from any such
Liabilities.
D.I. 35-2, Ex. 4 § 2(c). When the relevant section is read in its totality, it is clear
that the Side Letter terminates MarkDutchCo and Markmidco' s liability "arising
out of, relating to or caused by the Retained eDialog Entities." It does not alter the
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American rule and force Zeta to cover MarkDutchCo and Markmidco's attorneys'
fees for litigation related to the eDialog entities.
Finally, MarkDutchCo and Markmidco have requested that I exercise the
inherent power of the court to award them fees and costs for litigating Zeta's claims.
Although I have been troubled by certain arguments and tactics employed by Zeta's
counsel in this case, I am not persuaded by the briefing that Zeta's conduct justifies
an award of fees and costs.

IV.

CONCLUSION
For the foregoing reasons, I will grant MarkDutchCo's motion for summary

judgment, MarkDutchCo' s motion to dismiss counterclaims, and Markmidco' s
motion to dismiss third-party claims except insofar as the motions seek an award of
fees and costs.
The Court will enter an Order consistent with this Memorandum Opinion.

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