inTeam Associates, LLC v. Heartland Payment Systems, Inc.

COURT OF CHANCERY
OF THE
STATE OF DELAWARE
TAMIKA R. MONTGOMERY-REEVES Leonard Williams Justice Center
VICE CHANCELLOR 500 N. King Street, Suite 11400
Wilmington, Delaware 19801-3734
Date Submitted: April 13, 2018
Date Decided: April 27, 2018
Thad J. Bracegirdle, Esquire Jeffrey L. Moyer, Esquire
Andrea S. Brooks, Esquire Travis S. Hunter, Esquire
Wilks, Lukoff & Bracegirdle, LLC Nicole K. Pedi, Esquire
4250 Lancaster Pike, Suite 200 Richards Layton & Finger, P.A.
Wilmington, DE 19805 One Rodney Square
920 N. King Street
Wilmington, DE 19801
RE: inTEAM Associates, LLC v. Heartland Payment Systems, LLC
Civil Action No. 11523-VCMR
Dear Counsel:
This letter opinion addresses Plaintiff and Counterclaim Defendant’s Motion
for Reargument. For the reasons stated herein, the Motion is DENIED.
I. BACKGROUND 1
On March 29, 2018, this Court issued its Order Crafting Remedy Following
Remand (the “Remand Order”) vacating the existing injunction against Heartland;
1
Terms not otherwise defined have the same meaning as in the Remand Order.
inTEAM v. Heartland
C.A. No. 11523-VCMR
April 27, 2018
Page 2 of 6
declining to issue new injunctions against Heartland, inTEAM, and Goodman; and
ordering Goodman to pay $399,997.08 in money damages for violating his non-
compete obligations. On April 5, 2018, inTEAM and Goodman filed their Motion
for Reargument. On April 13, 2018, Heartland filed its opposition to inTEAM and
Goodman’s Motion.
II. ANALYSIS
Under Court of Chancery Rule 59(f), a party may move for reargument within
five days after the filing of the Court’s opinion. 2 Reargument will be granted only
where the court “overlooked a decision or principle of law that would have
controlling effect or . . . misapprehended the facts or the law so the outcome of the
decision would be different.”3 A motion for reargument is not a mechanism to
present new arguments or to relitigate claims already considered by the Court.4
2
Ct. Ch. R. 59(f).
3
Pontone v. Milso Indus. Corp., 2014 WL 4352341, at *1 (Del. Ch. Sept. 3, 2014);
see also Medek v. Medek, 2009 WL 2225994, at *1 (Del. Ch. July 27, 2009).
4
E.g., Oliver v. Bos. Univ., 2006 WL 4782232, at *1 (Del. Ch. Dec. 8, 2006) (“[N]ew
arguments that have not previously been raised cannot be considered for
reargument.” (quoting Lane v. Cancer Treatment Ctrs. of Am., Inc., 2000 WL
364208, at *1 (Del. Ch. Mar. 16, 2000))); In re ML/EQ Real Estate P’ship Litig.,
2000 WL 364188, at *1 (Del. Ch. Mar. 22, 2000).
inTEAM v. Heartland
C.A. No. 11523-VCMR
April 27, 2018
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In the Remand Order, this Court found that the unclean hands doctrine barred
injunctive relief for both inTEAM and Heartland and rejected Goodman’s
affirmative defenses.5 inTEAM and Goodman now argue that the Court “materially
misinterpret[ed] and misappl[ied] the Delaware Supreme Court’s mandate.”6
Specifically, they disagree with the Court’s interpretation of the Supreme Court’s
opinion as a reversal of both the holding that Goodman did not breach the non-
compete and the finding that Heartland had knowledge of Goodman and inTEAM’s
actions. 7 As a result, inTEAM and Goodman aver that the Court erroneously
awarded Heartland damages and ignored Goodman’s affirmative defenses.8
All of inTEAM and Goodman’s arguments in their Motion have been
previously made and rejected. First, inTEAM already argued that the Delaware
Supreme Court’s decision precluded this Court from lifting the injunction previously
entered against Heartland. 9 But the Court did not read the Supreme Court’s opinion
5
inTEAM Assocs., LLC v. Heartland Payment Sys., LLC, 2018 WL 1560058, at *2,
*5 (Del. Ch. Mar. 29, 2018) (ORDER).
6
Pl. and Countercl. Def.’s Mot. for Reargument 2.
7
Id. at 4–5.
8
Id. at 9–14.
9
Compare Pl. and Countercl. Def.’s Answering Br. on Remand 2 (“The Delaware
Supreme Court explicitly affirmed this Court’s entry of an injunction against
inTEAM v. Heartland
C.A. No. 11523-VCMR
April 27, 2018
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to prohibit it from vacating Heartland’s injunction as an appropriate remedy on
remand. Thus, the Court rejected inTEAM and Goodman’s arguments and vacated
the injunction based on inTEAM’s unclean hands. 10 Second, inTEAM already
argued that Heartland’s affirmative defenses should not be considered on remand
because Heartland did not raise this issue on appeal. 11 inTEAM’s contention
notwithstanding, this Court followed the Supreme Court’s instruction to consider an
appropriate remedy for Heartland on remand. 12 This Court concluded that the
doctrine of unclean hands barred both inTEAM and Heartland from receiving
Heartland and that decision is final.”), and id. at 39 (“Heartland’s request that this
Court vacate the injunction against it is baseless since the Delaware Supreme Court
specifically affirmed this Court’s entry of the injunction against Heartland.”), with
Pl. and Countercl. Def.’s Mot. for Reargument 10 (“On remand, the Court found
that inTEAM was guilty of unclean hands and vacated on that ground the injunction
previously entered against Heartland – even though the entry of the injunction had
been affirmed by the Supreme Court.”).
10
inTEAM Assocs., 2018 WL 1560058, at *2.
11
Compare Pl. and Countercl. Def.’s Answering Br. on Remand 39–40 (“The
Supreme Court did not instruct this Court to consider Heartland’s affirmative
defenses because it already affirmed this Court’s finding of Heartland’s breach and
the remedy for that breach.”), and id. at 40 (“Heartland never asserted on appeal its
entitlement to re-argue affirmative defenses on remand.”), with Pl. and Countercl.
Def.’s Mot. for Reargument 4 (“[T]he Supreme Court did not . . . direct this Court
to reconsider its prior rejection of Heartland’s affirmative defenses – in fact,
Heartland never challenged those aspects of the Court’s judgment in its appeal.”).
12
Heartland Payment Sys., LLC v. inTEAM Assocs., LLC, 171 A.3d 544, 547 (Del.
2017).
inTEAM v. Heartland
C.A. No. 11523-VCMR
April 27, 2018
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equitable relief. 13 Third, Goodman continues to assert that his breach of contract
falls outside of the statute of limitations.14 The Court considered and rejected this
argument in the Remand Order. 15 Fourth and finally, inTEAM argues that
“Heartland fail[ed] to prove that inTEAM was not being transparent” with its
development activities. 16 But the Court considered this argument and determined
that the Supreme Court must have rejected inTEAM’s disclosure argument because
“[o]therwise, waiver would have been the necessary outcome in the Supreme Court’s
opinion.” 17 inTEAM clearly disagrees with the Court’s Remand Order. But that
disagreement is not proper grounds for reargument. inTEAM improperly seeks to
rehash arguments that this Court has already considered and rejected. The proper
vehicle for inTEAM and Goodman’s arguments is appeal. 18
13
inTEAM Assocs., 2018 WL 1560058, at *2.
14
Pl. and Countercl. Def.’s Mot. for Reargument 13 (“But the Remand Order ignores
Mr. Goodman’s defense that Heartland’s damages are barred by the statute of
limitations, in whole or in part, as raised on remand.”).
15
inTEAM Assocs., 2018 WL 1560058, at *5 (“Goodman’s affirmative defense[] of
laches . . . fail[s] because Heartland lacked knowledge of Goodman’s breaching
behavior.”).
16
Pl. and Countercl. Def.’s Sur-Reply Br. 11–12.
17
inTEAM Assocs., 2018 WL 1560058, at *5 n.4.
18
See Supr. Ct. R. 8.
inTEAM v. Heartland
C.A. No. 11523-VCMR
April 27, 2018
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III. CONCLUSION
For the foregoing reasons, inTEAM and Goodman’s Motion for Reargument
is DENIED.
IT IS SO ORDERED.
Sincerely,
/s/Tamika Montgomery-Reeves
Vice Chancellor