BioVeris Corporation v. Meso Scale Diagnostics, LLC
8692-VCMR
| Del. Ch. | Nov 2, 2017Background
- In 1995 BioVeris (then IGEN) and Meso organized a joint venture, Meso Scale Diagnostics (Diagnostics); a 2001 JVA set buyout and dispute-resolution procedures.
- After Roche acquired IGEN in 2004 the parties executed a 2004 Settlement Agreement settling litigation and providing for Meso to buy BioVeris’s 31% interest; the Settlement incorporated parts of the JVA but contained its own forum-selection and fee-shifting provisions and an integration clause.
- The parties completed appraisals and agreed on a purchase price; quarterly payments (5% of Diagnostics net sales) were made from 2007 until May 28, 2010, when Meso sent a letter stating the May 28 payment “represents the remaining balance due on the Purchase Price” and made no further payments.
- BioVeris waited nearly three years to object, sending demand/negotiation letters in April–May 2013, and filed suit in Delaware Chancery on June 28, 2013 seeking the unpaid balance, breach penalties, board appointment relief, and attorneys’ fees.
- The court concluded Meso’s 2010 letter + partial payment constituted a total breach with anticipatory repudiation, triggering the analogous three‑year Delaware statute of limitations; BioVeris filed after that period and did not establish tolling or extraordinary circumstances, so claims for damages and fees were barred by laches. The court reserved decision on certain JVA remedies (Section 8.5.6) pending supplemental briefing.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether BioVeris’s claims for unpaid Purchase Price and fees are barred by laches/analogous statute | BioVeris: claims timely because it pursued dispute resolution (invoked JVA negotiation/arbitration) and there was a bona fide dispute; tolling applies | Meso: 2010 repudiation was total breach that started the 3‑year limitations clock; claims filed late; no tolling or extraordinary circumstances | Held: barred by laches — analogous 3‑year statute applies; suit filed after deadline and no tolling/extraordinary circumstances shown |
| Whether the 2010 letter/payment constituted a total breach or only an installment breach | BioVeris: installment contract rule applies (each missed installment gives rise to new claim); Section 243(3) exception applies because remaining duties are money installments | Meso: the 2010 letter was an unequivocal repudiation plus nonperformance — constitutes total breach triggering limitations for whole contract | Held: 2010 letter was an anticipatory repudiation accompanied by nonperformance — total breach; statute ran from May 28, 2010 |
| Which agreement governs remedies and dispute forum for the unpaid Purchase Price and attorneys’ fees: the JVA or the Settlement Agreement | BioVeris: Settlement incorporates JVA terms and JVA dispute procedures apply; it tried to invoke JVA negotiations | Meso: Settlement Agreement supersedes and mandates Delaware courts and contains fee‑shifting; forum selection governs | Held: Settlement Agreement governs these claims; forum selection requires Delaware courts and fee‑shifting is available there; therefore analogous 3‑year statute applies |
| Availability and forum/statute questions for remedies under JVA Section 8.5.6 (15% penalty and board appointment) | BioVeris: seeks contractual penalty (15%) and right to appoint board member under 8.5.6 | Meso: argued release in 2008 (alternative) but did not press because laches dispositive; parties did not brief how Settlement affects these JVA remedies | Held: Court reserved judgment on Section 8.5.6 remedies and ordered supplemental briefing (parties failed to address interplay, governing forum, or limitations for those remedies) |
Key Cases Cited
- Reid v. Spazio, 970 A.2d 176 (Del. 2009) (equitable laches doctrine and limitations in Chancery)
- IAC/InterActiveCorp v. O’Brien, 26 A.3d 174 (Del. 2011) (factors for when extraordinary circumstances justify ignoring analogous statute of limitations)
- Levey v. Brownstone Asset Mgmt., LP, 76 A.3d 764 (Del. 2013) (what qualifies as pursuing a claim before the limitations period expires)
- Kraft v. WisdomTree Invs., Inc., 145 A.3d 969 (Del. Ch. 2016) (application of analogous statute of limitations in Chancery and presumption of laches)
- Worrel v. Farmers Bank of the State of Del., 430 A.2d 469 (Del. 1981) (distinguishing breaches by nonpayment without repudiation)