Infab Holdco, Inc. v. Donald J. Cusick, C.A. No. 2022-0050-KSJM

Don Cusick sold his family’s companies (collectively, “Infab”) to private equity firm HKW in April 2020 via a stock purchase agreement, which included earnout provisions.
Cusick remained with Infab post-sale, but was later terminated; Infab then sued Cusick and related entities for various contract, tort, and statutory claims.
Defendants (Cusick and related trusts/entities) counterclaimed for breach of contract regarding the earnout and other torts.
Both sides filed cross-motions for summary judgment on multiple claims, including fraud, breach of contract, fiduciary duties, trade secrets, conversion, violation of the Computer Fraud and Abuse Act, and restrictive covenants.
The key facts hinge on allegations that Cusick manipulated Infab’s EBITDA to meet earnout goals through fraudulent conduct, including false inventory and undisclosed self-dealing with vendors.
The court’s order resolves only certain issues at summary judgment, leaving several disputes for trial due to material issues of fact.

Issue	Plaintiff's Argument	Defendant's Argument	Held
Earnout Claims	Cusick’s fraud inflated EBITDA; thus, no earnout due.	Earnout calculation is final/binding; fraud claims irrelevant post-deadline.	Material facts in dispute; no summary judgment for either side.
Representations & Warranties	Clear fraud and justifiable reliance; claims are timely.	No intent/reliance/damages; claims untimely under SPA survival clause.	Fraud claim survives; contract claim untimely—defense wins.
Fiduciary Duty	Fraudulent self-dealing and competition by Cusick violated duties.	Duties do not arise from contract; not owed post-termination.	Not duplicative of contract; material facts preclude SJ.
Trade Secrets	Seeks injunctive relief, not damages, for alleged misappropriation.	No specific damages; duplicative of contract claim.	Injunctive relief viable; claim not preempted by contract.
Conversion	Defendants converted Infab computers and profits via Sterilux scheme.	No identified chattel; claims moot as computers returned; money not convertible.	Plaintiffs waived arguments; defense wins SJ on this count.
Computer Fraud & Abuse Act	Unauthorized retention/use of computers post-employment.	No evidence of requisite use, intent, or damages.	Plaintiffs waived arguments; defense wins SJ on this count.
Restrictive Covenants	Breach by Cusick of confidentiality, non-compete, and non-solicit covenants.	No sufficient evidence of breach or harm; facts in dispute.	Material factual disputes; no summary judgment.

Pellaton v. Bank of N.Y., 592 A.2d 473 (Del. 1991) (contract interpretation is a matter of law)
O’Brien v. Progressive N. Ins. Co., 785 A.2d 281 (Del. 2001) (contract ambiguity arises only when reasonably susceptible to multiple meanings)
Emerald P’rs v. Berlin, 726 A.2d 1215 (Del. 1999) (issues not briefed are deemed waived)
Kuroda v. SPJS Hldgs., 971 A.2d 872 (Del. Ch. 2009) (conversion of money only lies where identical money must be returned)
VLIW Tech., LLC v. Hewlett-Packard Co., 840 A.2d 606 (Del. 2003) (elements of breach of contract claim)