Data Logger Solutions, LLC v. Digi SmartSense, LLC

CourtSuperior Court of Delaware
DecidedSeptember 18, 2024
DocketN20C-10-121 EMD
StatusPublished

This text of Data Logger Solutions, LLC v. Digi SmartSense, LLC (Data Logger Solutions, LLC v. Digi SmartSense, LLC) is published on Counsel Stack Legal Research, covering Superior Court of Delaware primary law. Counsel Stack provides free access to over 12 million legal documents including statutes, case law, regulations, and constitutions.

Bluebook
Data Logger Solutions, LLC v. Digi SmartSense, LLC, (Del. Ct. App. 2024).

Opinion

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

DATA LOGGER SOLUTIONS, LLC, ) ) Plaintiff, ) ) v. ) C.A. No. N20C-10-121 EMD ) DIGI SMARTSENSE, LLC, ) ) Defendant. ) ) )

Submitted: June 28, 2024 Decided: September 18, 2024

Upon Defendant’s Motion for Remittitur or, in the Alternative, a New Trial GRANTED

Upon Plaintiff’s Motion For Attorney’s Fees, Cost, and Judgment DENIED

Krista M. Reale, Esquire, Margolis Edelstein, Wilmington, Delaware, Herbert W. Mondros, Esquire, Rigrodsky Law, P.A. Wilmington, Delaware. Glenn Ricketti, Margolis Edelstein, Philadelphia, Pennsylvania. Attorneys for Plaintiff Data Logger Solutions, LLC.

David J. Soldo, Esquire, K. Tyler O’Connell, Esquire, Barnaby Grzaslewicz, Esquire, Samuel E. Bashman, Esquire, Morris James LLP, Wilmington, Delaware, Eric C. Liebeler, Esquire, Kevin Kitchen, Esquire, Stinson LLP, Minneapolis, Minnesota. Attorneys for Defendant Digi SmartSense, LLC.

DAVIS, J.

I. INTRODUCTION

Plaintiff, Data Logger Solutions, LLC (“DLS”) filed this breach of contract, quasi-

contract, and torts action on October 13, 2020, alleging that Defendants, Digi SmartSense, LLC

and Digi International, Inc. breached an agreement by refusing to pay DLS commissions owed

under an agreement (the “Reseller Agreement”).1 On November 30, 2020, Digi SmartSense,

1 See Complaint, D.I. 1. LLC (“Digi”) and Digi International, Inc. filed their answer and a counterclaim alleging one

count of breach of contract.2

On January 3, 2023, DLS filed its Amended Complaint, with the following seven counts:

(i) breach of contract, (ii) breach of implied covenant of good faith and fair dealing, (iii) tortious

interference of a contract, (iv) fraud, (v) promissory estoppel, (vi) punitive damages, and (vii)

declaratory relief.3 After one motion to dismiss hearing4 and two hearings on cross-motions for

summary judgment, the Court dismissed Digi International as a party, and only DLS’s Count I—

breach of contract—survived the motions.

On March 22, 2024, after a five-day jury trial, DLS prevailed in the remaining breach of

contract claim against Digi.5 The jury found the following: (i) the term “Qualified Lead” (“QL”)

in the Reseller Agreement means a company with an individual associated with it; (ii) Digi

breached the Reseller Agreement; (iii) Digi owes DLS $1,632,062 in past commissions; and (iv)

Digi owes DLS $10,000,000 in future commissions.6

On April 8, 2024, Digi submitted its Brief in Support of its Motion for Remittitur or, in

the Alternative, a New Trial (“Digi Motion”).7 On April 22, 2024, DLS filed its Brief in

Opposition of Defendant’s Motion for Remittitur or, in the Alternative, a New Trial (“DLS

Opposition”).8 Also, on April 8, 2024, DLS submitted its Opening Brief in Support of Plaintiff’s

Post-Trial Motion for Attorney’s Fees, Costs, and Interest (“DLS Motion”).9 On April 22, 2024,

2 Answer of Digi SmartSense, LLC and Digi International Inc. and Counterclaim of Digi SmartSense, LLC, D.I. 5. 3 D.I. 154. 4 D.I. 196. 5 D.I. 353. 6 D.I. 352. 7 Digi SmartSense, LLC's Brief in Support of Its Motion for Remittitur, or in the Alternative, a New Trial (hereinafter “Digi Motion”) D.I. 362. 8 Plaintiff’s Brief in Opposition of Defendant’s Motion for Remittitur, or in the Alternative, a New Trial (hereinafter “DLS Opp.”) D.I. 367. 9 Opening Brief in Support of Plaintiff’s Post-Trial Motion for Attorney’s Fees, Costs, and Interest (hereinafter “DLS Motion”) D.I. 361.

2 Digi filed its Answering Brief in Opposition to Plaintiff's Motion for Attorney's Fees, Costs and

Interest (“Digi Opposition”).10 The Court held a hearing on June 28, 2024. At the end of the

hearing, the Court took the motions under advisement.

For the reasons that follow, the Court GRANTS Digi’s Motion and DENIES DLS’s

Motion.

II. TRIAL EVIDENCE11

On September 1, 2014, DLS and Temperature@lert (“TempAlert”) entered into the

Reseller Agreement. The Reseller Agreement obligated DLS, as the Reseller, to provide lead

generation and strategic sales services to TempAlert, and TempAlert in return, to pay DLS a

commission on all sales revenue generated from the QLs DLS provided.

In 2015, DLS referred John Davidson, a Walmart employee, to TempAlert, and soon

after, Walmart and TempAlert entered into an agreement for temperature monitoring goods and

related subscription services. Then, in October 2017, Digi, a publicly owned corporation,

acquired TempAlert; and with the acquisition, Digi inherited all of TempAlert’s contractual

obligations.

On March 8, 2019, Digi sent DLS a letter, terminating the Reseller Agreement effective

April 8, 2019, pursuant to the Reseller Agreement paragraph 4. In December 2019, Digi sent

DLS an email, proposing a commission payment of $110,969.64 to constitute a “full and final

payment of any amounts due under the Reseller Agreement and acknowledgment of the

termination of the agreement and the satisfaction of all obligations and liabilities on behalf of

10 Digi SmartSense LLC’s Answering Brief in Opposition to Plaintiff's Motion for Attorney's Fees, Costs and Interest (hereinafter “Digi Opp”) D.I. 368. 11 The evidence is viewed in the light most favorable to the non-moving party.

3 both parties.” The parties disagreed on the amount of the final payment and this litigation

ensued.

During discovery, DLS learned Digi and Walmart entered into a Master Service

Agreement (“MSA”) on September 21, 2020, that would possibly govern all business between

Digi and Walmart. Pursuant to the Reseller Agreement, DLS believes Walmart (the company) is

DLS’s QL. As such, DLS sought past and future commission on all revenue Digi receives from

Walmart, including the transactions listed in the MSA. Digi argued that DLS interprets the

Reseller Agreement incorrectly, and DLS was only entitled commissions from the 2015 Walmart

transaction that included DLS’s QL (an individual), Mr. Davidson.

The Court held the term QL is ambiguous. The Court determined that a jury would need

to make a factual determination on the definition of QL. At trial, the jury needed to determine

the following questions: (i) if QL is an individual or a company with an individual associated

with it; (ii) if Digi breached the Reseller Agreement; (iii) whether DLS was owed past and future

commission; and if so, (iv) the amount of damages.12

At trial, Gary Barach—DLS’s expert— testified to amount of past and future commission

owed to DLS.13 Mr. Barach testified that Digi owes DLS $1,632,062 in past commissions14 and

$3,359,592 in future commissions.15 Per Mr. Barach’s trial testimony and expert report, DLS

was owed a total of, at most, $4,991,564.16 Gary Durham—Digi’s expert— testified that DLS

would be entitled to only $448,262.17 Mr. Durham also gave an expert opinion on Mr. Barach’s

expert report. Mr. Durham opined that Mr. Barach’s discount rate was too low and the number

12 D.I. 352. 13 See Digi Motion, Ex. A. Trial Transcript March 20, 2024 (hereinafter, “March 20 Tr.”). 14 Id. at 110:3-17. 15 Id. 16 Id. 17 Digi Motion, Ex. C. Trial Transcript March 21, 2024 (hereinafter “March 21 Tr.”), at 13:5-10.

4 of Walmart centers Mr. Barach included in his report was inaccurate.18 Mr. Barach and Mr.

Durham testified that their opinions in the case are based on a reasonable degree of economic

probability.19 No other expert testimony was offered on damages or otherwise.

Three Digi employees testified live as lay witnesses.

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