inTeam Associates, LLC v. Heartland Payment Systems, Inc.
11523-VCMR
| Del. Ch. | Nov 18, 2016Background
- inTEAM sued Heartland alleging breaches of a Co‑Marketing Agreement; Heartland counterclaimed and sought enforcement of non‑solicitation and other covenants. The Court previously issued an Opinion enforcing the non‑competition and non‑solicitation covenants.
- inTEAM moved for reargument to challenge the Court’s refusal to shift inTEAM’s attorney fees to Heartland under the CMA and to recharacterize Heartland’s conduct as willful misconduct that would avoid contractual damage limits.
- Heartland moved for reargument on two grounds: (1) the Court miscalculated the injunctive period against Goodman by not applying a tolling clause in the Consulting Agreement, and (2) the Court miscalculated the injunctive period against Heartland by using an early Colyar email as the breach start date.
- The Court reviewed Rule 59(f) reargument standards: relief requires a material overlooked controlling decision, legal principle, or a material misapprehension of fact or law; new arguments or merely rehashed arguments are insufficient.
- The Court denied inTEAM’s motion because inTEAM failed to prove willful misconduct and raised only arguments/evidence already considered.
- The Court denied Heartland’s motion because the tolling argument was raised for the first time (waived), and the Court’s start‑date determination rested on multiple record elements, not a single email, so no misapprehension was shown.
Issues
| Issue | Plaintiff's Argument | Defendant's Argument | Held |
|---|---|---|---|
| Whether inTEAM can shift its fees to Heartland under CMA and avoid Section 11.2 liability cap because Heartland’s breach was "willful misconduct" | inTEAM: Heartland acted intentionally/maliciously; therefore Section 11.3 (willful misconduct) removes the fee/ liability cap and permits fee‑shifting | Heartland: inTEAM did not prove willful misconduct; liability limits apply and no fee‑shifting | Court: Denied reargument; inTEAM failed to prove willful misconduct and offered no new material facts — no fee‑shifting or escape from cap. |
| Whether the injunction period against Goodman should be tolled under Consulting Agreement §11(f) | n/a (argument not raised by inTEAM) | Heartland: periods should exclude litigation/violation time per tolling clause, altering injunction length | Court: Denied reargument; Heartland first raised this argument on reargument (waived), so no reconsideration. |
| Whether the Court miscalculated the start date (and thus length) of Heartland’s injunction by relying on a single Colyar email | inTEAM: Court relied on record evidence to fix start date; systemic conduct demonstrated breach | Heartland: single email should not trigger breach start date; Court misapplied its own analysis | Court: Denied reargument; start date was based on multiple record elements (email was one element), and Court reasonably exercised discretion in fixing injunction length. |
Key Cases Cited
- No officially‑reported (non‑WL) authorities with Bluebook reporter citations are cited in this Letter Opinion.
