152 N.E.3d 616
Ind. Ct. App.2020Background
- ShermansTravel (Shermans) and Gen3Ventures (Gen3) entered a settlement requiring Shermans to (1) make scheduled payments and (2) return and delete all Gen3 subscriber data and execute an affidavit confirming deletion; Gen3 would then dismiss its suit.
- Shermans paid in full and provided an affidavit stating it had deleted Gen3 data; Gen3 nonetheless refused to dismiss, alleging Shermans retained/used Gen3 data and continued to send emails to Gen3 subscribers.
- Evidence showed emails to Gen3 addresses after the settlement (notably 68,521 emails in a 13-day span) and that shared files on Dropbox/GoogleDrive/GoogleDocs contained Gen3 subscriber information; Sailthru and an e-discovery vendor were involved in deletion efforts.
- Gen3 obtained June 13 Sailthru data showing matches to Gen3 subscriber profiles and millions of emails sent to those profiles through June 2019; Shermans produced an expert affidavit asserting some of those addresses were independently acquired.
- Trial court granted summary judgment for Gen3, holding Shermans failed to provide the required “complete performance” under the settlement; the Court of Appeals reversed and remanded, finding the substantial-performance doctrine applies and material factual disputes exist.
Issues
| Issue | Plaintiff's Argument (Gen3) | Defendant's Argument (Shermans) | Held |
|---|---|---|---|
| Whether the settlement’s "complete performance" condition excludes the doctrine of substantial performance | "Complete performance" is a condition precedent; substantial-performance doctrine inapplicable | Settlement does not expressly negate substantial performance; doctrine should apply | Court: Substantial-performance doctrine can apply here; whether Sherman substantially performed is a fact question |
| Whether Shermans "ceased to utilize" Gen3 data given post-settlement emails | Any post-settlement use (each email sent) breaches the agreement | Many sends were inadvertent; Shermans ceased utilizing and took steps to delete; minimal relative volume | Court: Existence/extent of use is disputed; material fact precludes summary judgment |
| Whether the June 13 Sailthru matches were Gen3 subscribers or independently acquired by Shermans | June 13 data shows those profiles originated from Gen3 lists and continued receives | Shermans’ expert says many were independently acquired/overlap, not Gen3-origin | Court: Conflicting evidence creates a genuine factual dispute for trial |
| Whether retained copies on Dropbox/GoogleDrive/GoogleDocs constituted failure to destroy records | Presence of Gen3 data on shared platforms shows non-deletion and ongoing availability | Shermans promptly removed data when notified and engaged QDiscovery; executed affidavit | Court: Facts about timing, scope, and materiality of retained files are disputed |
Key Cases Cited
- General Discount Corp. v. Weiss Mach. Corp., 437 N.E.2d 145 (Ind. Ct. App. 1982) (applied substantial-performance doctrine to a consent judgment where nonperformance was minor)
- Gibson v. Neu, 867 N.E.2d 188 (Ind. Ct. App. 2007) (held substantial performance inapplicable where timely payment was an essential condition)
- Dove v. Rose Acre Farms, Inc., 434 N.E.2d 931 (Ind. Ct. App. 1982) (doctrine of substantial performance does not apply where the breached term is essential)
- Johnson v. Taylor Bldg. Corp., 371 N.E.2d 404 (Ind. Ct. App. 1978) (applied substantial performance where deviation was not material)
- McConnell v. Fulmer, 105 N.E.2d 817 (Ind. 1952) (performance requires substantial compliance, not perfection)
- Gen. Motors Corp. v. Northrop Corp., 685 N.E.2d 127 (Ind. Ct. App. 1997) (courts will not rewrite contracts or insert terms the parties did not agree to)