Dror Ironi v. Efi Global, Inc .

United States Court of Appeals
For the Seventh Circuit
Chicago, Illinois 60604
Argued May 21, 2020
Decided June 16, 2020
Before
DANIEL A. M ANION , Circuit Judge
A MY C. BARRETT, Circuit Judge
MICHAEL B. BRENNAN , Circuit Judge
No. 19-3006
DROR I RONI , et al.,
Plaintiffs-Appellants,
v.
EFI GLOBAL, I NC ., et al.,
Defendants-Appellees,
Appeal from the United States District
Court for the Northern District of
Illinois, Eastern Division
No. 18-cv-07989
Edmond E. Chang,
Judge.
O R D E R
Dror, Dennis, and Dan Ironi created an environmental consulting company. They sold
it in 2015 to Defendants EFI Global and CL Acquisition Holdings for $7 million, broken
down like this: $4.2 million in cash and 28,000 shares of restricted preferred stock in CL
Holdings. The parties memorialized this sale in the Purchase Agreement, which states
the shares shall issue to the Ironis at an “agreed value” of $100 per share.1 The dispute
here arose three years later when the Ironis redeemed their 28,000 shares at a much lower
1 28,000 shares × $100 = $2.8 million in shares. $2.8 million in shares + $4.2 million in cash = $7 million
total.
NONPRECEDENTIAL DISPOSITION
To be cited only in accordance with Fed. R. App. P. 32.1

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Nos. 19-3006 Page 2
price: $26 per share. They filed suit to rescind the contract based on breach and mutual
mistake, with separate claims for equitable fraud and unjust enrichment. Their claims
(governed by Delaware law) all boil down to a theory that the contract’s reference to
“agreed value” really means “market value” or “actual value,” and that Defendants
misrepresented and oversold the shares’ 2015 worth. The Ironis insist this caused them
to receive less than the full $7 million sale amount.
Defendants moved for judgment on the pleadings and the district court granted their
motion. We review de novo, N. Ind. Gun & Outdoor Shows, Inc. v. City of South Bend, 163
F.3d 449, 452 (7th Cir. 1998), and conclude this ruling was proper because nothing justifies
rescission here. The Ironis’ breach- and mistake-based approach is undermined by the
contract itself. They cannot claim Defendants breached the contract by failing to pay the
entire $7 million when the contract’s language simply does not support the notion that
the parties meant $100 per share to serve as a market/actual valuation. This reality
undercuts the Ironis’ reliance on mutual mistake, too, as does their clear understanding
and assumption of the economic risk associated with accepting restricted shares over
more cash.
The Ironis’ equitable fraud claim cannot advance, either. Equitable fraud requires a
showing that one party made a false representation. Gaffin v. Teledyne, Inc., 611 A.2d 467,
472 (Del. 1992). But the central purported misrepresentation here—the contract’s per
share “value”—is not a misrepresentation at all. Again, nothing in the Purchase
Agreement advertises the shares’ market or actual value; the contract simply sets forth
an agreement between two sophisticated parties on the shares’ value for the particular
transaction at hand. And any alleged misrepresentations made outside the contract’s four
corners are beside the point. Not only does the contract contain an integration clause, but
elsewhere in the written agreement the Ironis explicitly acknowledged they relied on no
warranties or representations other than those contained in the sale documents.
Lastly, the presence of a valid, enforceable contract here negates the unjust enrichment
claim. See Kuroda v. SPJS Holdings, L.L.C., 971 A.2d 872, 891 (Del. Ch. 2009) (“A claim for
unjust enrichment is not available if there is a contract that governs the relationship
between parties that gives rise to the unjust enrichment claim.”); Bakerman v. Sidney Frank
Importing Co., 2006 WL 3927242, *18 (Del. Ch. Oct. 10, 2006) (“When the complaint alleges
an express, enforceable contract that controls the parties’ relationship, however, a claim
for unjust enrichment will be dismissed.”). Apart from repeating the same arguments
rejected above, the Ironis fail to call the Purchase Agreement’s validity into question.
For all these reasons and for those articulated in the district court’s well-reasoned
opinion, we AFFIRM the entry of judgment on the pleadings.

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