United States District Court, E.D. Michigan, Southern Division
EFFYIS, INC. and HOTTOLINK, INC., Plaintiffs,
DARREN KELLY, Defendant.
OPINION AND ORDER GRANTING PLAINTIFFS' MOTION FOR
SUMMARY JUDGMENT AND DENYING AS MOOT PLAINTIFFS' MOTION
TO FILE AMENDED DEFENSES
H. CLELAND, UNITED STATES DISTRICT JUDGE.
Effyis, Inc. and Hottolink, Inc. sue their former employee,
Defendant Darren Kelly. Plaintiffs seek declaratory judgment
as to the existence of a valid settlement agreement between
the parties for Kelly to waive any claims he could bring
against Plaintiffs related to his termination. In the
alternative, Plaintiffs also bring claim for declaratory
judgment on the issue of cause for Kelly's termination
and for breach of fiduciary duty. Kelly contends that the
parties never reached an agreement and brings a counterclaim
for breach of his employment contract based on his
termination. Pending before the court is Plaintiffs'
motion to file an amended answer to Kelly's counterclaim
in order to add additional affirmative defenses. Also pending
before the court is Plaintiffs' motion for summary
judgment on its declaratory judgment claim to enforce the
settlement agreement (Count I) and Kelly's breach of
contract counterclaim. Both motions have been fully briefed,
and the court concludes that a hearing is not necessary.
See E.D. Mich. 7.1(f)(2). For the reasons stated
below, the court will grant Plaintiffs' motion for
summary judgment and will deny as moot Plaintiffs' motion
to file amended affirmative defenses.
Effyis was co-founded by Scott Purdon, who is not a party to
this suit. In 2012, Defendant Darren Kelly became an owner of
Effyis. Both Purdon and Kelly arranged to sell their
ownership interest in Effyis to Plaintiff Hottolink in early
2015 as part of an acquisition deal. As part of this sale,
Kelly entered into an employment contract to become the
President of Effyis. In 2017, Plaintiffs terminated
Kelly's employment. The parties dispute the basis for
parties, joined by Purdon, attempted to negotiate a
settlement for claims arising from Kelly's termination.
According to Plaintiffs, Kelly and Purdon directly negotiated
the terms of a settlement during a phone conversation on
April 12, 2017. (ECF No. 30, PageID.386.) Kelly admits that
he spoke with Purdon about a settlement on that day but
denies that they agreed to any terms of settlement. (ECF No.
30-5, PageID.497-98; ECF No. 35, PageID.562.) Following the
call, Purdon sent Kelly an email which Plaintiffs contend
memorialized the terms of the settlement to which Kelly
agreed over the phone. Plaintiffs assert that the terms of
the settlement include that: (1) Hottolink would fully repay
Kelly for a loan he made during Effyis's acquisition by
Hottolink, (2) Kelly would receive $15, 000 for his incurred
legal fees related to the settlement negotiations, and (3)
Kelly and Effyis/Hottolink would sign waivers and releases of
“any and all claims” the parties had against each
other. (ECF No. 30, PageID.386-87.) The April 12, 2017 email
from Purdon to Kelly reads as follows:
Thank you for all your participation and support during this
very difficult situation! Please respond to this email with
your confirmation (YES I CONFIRM). Once I have your
confirmation, we can get the attorneys to finalize the
necessary legal paperwork so that HL can process your
1) Full Loan Repayment
2) $15, 000 USD Payment
3) Signed waivers (US and Japan)
(ECF No. 30-2, PageID.418.) In response to the email, ...