SUPERIOR COURT OF THE STATE OF DELAWARE PAUL R. WALLACE LEONARD L. WILLIAMS JUSTICE CENTER JUDGE 500 N. KING STREET, SUITE 10400 WILMINGTON, DELAWARE 19801 (302) 255-0660
Submitted: August 22, 2023 Decided: November 17, 2023
Timothy S. Martin, Esquire Thomas A. Uebler, Esquire WHITE AND WILLIAMS LLP Kathleen A. Murphy, Esquire 600 N. King Street, Suite 800 Terisa A. Shoremount, Esquire Wilmington, Delaware 19801 MCCOLLOM D’EMILIO SMITH UEBLER LLC 2751 Centerville Road, Suite 401 Siobhan K. Cole, Esquire (argued) Wilmington, Delaware 19808 WHITE AND WILLIAMS LLP 1650 Market Street, Suite 1800 Jeffrey D. Horst, Esquire Philadelphia, Pennsylvania 19103 Joyce Gist Lewis, Esquire (argued) Barclay H. Vallotton, Esquire KREVOLIN & HORST, LLC 1201 West Peachtree Street NW, Suite 3250 Atlanta, Georgia 30309
RE: Everphone, Inc. v. Go Technology Management, LLC C.A. No. N23C-03-022 PRW CCLD Defendant’s Motion to Dismiss
Dear Counsel: This Letter Opinion and Order1 resolves Go Technology Management, LLC’s
pending Motion to Dismiss the Complaint. For the reasons explained below, the
motion is DENIED as to two claims and GRANTED on the rest.
1 The Court delivers this decision mindful that the parties’ full understanding of and familiarity with the factual background, the operative agreements mentioned, and the arguments each makes on the instant motion obviates a need for a fuller recounting of such in this writing. Everphone, Inc. v. Go Technology Management, LLC C.A. No. N23C-03-022 PRW CCLD November 17, 2023 Page 2 of 27
I. FACTUAL AND PROCEDURAL BACKGROUND
A. THE PARTIES AND THEIR CONTRACTS
As stated in the Complaint, “[i]n December 2021 Go Technology approached
Everphone through an information technology service provider, EBF, Inc., for the
purpose of sourcing and purchasing tablets that Go Technology would provide to
end users.”2 From there, Everphone identified a tablet manufacturer and product for
Go Technology’s use.3
The parties subsequently entered into two agreements. The first—entered
between Everphone and EBF, for the benefit of Go Technology—was the “Rental
Agreement”4 that specified the price and quantity of the tablets Everphone was
2 Compl. ¶ 6 (D.I. 1). 3 Id. ¶¶ 9-11. 4 Id. ¶ 16; Compl., Ex. A (“Rental Agreement”); Rental Agreement, Ex. A (Terms and Conditions) § 1.1: Rental and Support. Pursuant to the terms of this Agreement and the Proposal, everphone will: (i) rent to Customer the smartphones, tablets, or other computing devices described more fully in one or more Proposals (each, a “Device”, and collectively, the “Devices”) for use by GoTechnology Management, LLC (“Go Technology”) and GoTechnology’s customers (collectively “End Users”); and (b) provide the limited repair and replacement services set forth in this Agreement (the “Service”) to enable Customer to provide support and management for the Devices to End Users. For the avoidance of doubt, Customer shall be solely responsible for supporting End Users. (errors in original). Everphone, Inc. v. Go Technology Management, LLC C.A. No. N23C-03-022 PRW CCLD November 17, 2023 Page 3 of 27
providing.5 The second—entered into between Everphone and Go Technology—
was the “Guaranty.”6 According to Everphone, that Guaranty was “a material
inducement” used to coax its acceptance of the Rental Agreement.7
Under the Rental Agreement, Everphone began shipping tablets to
Go Technology.8 Approximately three months into that agreement, Go Technology
reported experiencing technical issues with the tablets.9 Everphone says it made
5 Rental Agreement at 2. 6 Compl. ¶¶ 24-25; Compl., Ex. B (“Guaranty”); id. § 1: Guarantor hereby irrevocably, absolutely and unconditionally guarantees to Everphone the full and prompt payment when due of the rent and any other sum of money due under the Rental Agreement, including but not limited to any indemnification obligations thereunder, together with all costs of collection and reasonable attorneys’ fees that may be incurred by everphone in connection with the enforcement of this Guaranty (collectively, the “Obligations”). Guarantor acknowledges and agrees that this Guaranty Agreement (“Guaranty”) is a guaranty of payment and not of collection and upon any default by EBF under the Rental Agreement, which includes, but is not limited to, EBF’s failure to remit monies that may have been provided by Guarantor to EBF pursuant to a separate agreement related to Guarantor’s use of the mobile devices under the Rental Agreement. (errors in original). 7 Compl. ¶¶ 24-25. The Rental Agreement was “contingent on a guaranty from Go Technology Management, LLC of EBF Inc.’s obligations pursuant to this Agreement.” Rental Agreement at 4. 8 Compl. ¶¶ 32-45. 9 Id. ¶ 46 (“On May 9, 2022, Go Technology emailed EBF regarding an issue that Go Technology was experiencing with its network subscription through AT&T and its inability to connect some of the devices Go Technology received from Everphone to AT&T’s network.”). Everphone, Inc. v. Go Technology Management, LLC C.A. No. N23C-03-022 PRW CCLD November 17, 2023 Page 4 of 27
efforts to correct those alleged issues.10 But in June 2022, Go Technology declared
the Rental Agreement “cancelled”11 and sent back some of the tablets.12 Everphone
insists those tablets were all working properly.13
Following Go Technology’s declaration, Everphone demanded payment from
Go Technology and EBF for outstanding invoices and other fees due and owing
under the Rental Agreement and Guaranty.14 Go Technology and EBF refused to
pay.15 Accordingly, Everphone brought suit here.
B. THIS SUIT
Everphone’s Complaint has five claims: Breach of the Guaranty (Count I),16
10 Id. ¶¶ 47-52. 11 Id. ¶ 53 (“Instead, on or about June 10, 2022, Go Technology unilaterally declared, without any right or authority to do so, that the Agreement between EBF and Everphone was cancelled.”). 12 Id. ¶¶ 55-56 (“Go Technology’s purported return of the devices was done unilaterally and without contractual authority pursuant to the Agreement and Guaranty, which provide only the right to receive the replacement of any devices that fail to operate in accordance with the manufacturer’s specifications and operating instructions.”). 13 Id. ¶¶ 56-57 (“None of the devices Go Technology sent to Everphone on June 14, 2022, and July 7, 2022 failed to operate in accordance with the manufacturer’s specifications and operating instructions, nor did EBF or Go Technology ever claim such failure.”). 14 Id. ¶ 63 (“As a result, on January 12 2023, Everphone demanded payment from EBF and Go Technology pursuant to the terms of the Agreement and Guaranty for all amounts due and owing under the Agreement between EBF and Everphone, and reserved all rights with respect to the total losses Everphone incurred arising out of the Agreement.”) (errors in original). 15 Id. ¶¶ 69-70 (“EBF and Go Technology failed and refused to respond to Everphone’s January 12, 2023, demand.”). 16 Id. ¶¶ 71-79. Everphone, Inc. v. Go Technology Management, LLC C.A. No. N23C-03-022 PRW CCLD November 17, 2023 Page 5 of 27
Fraud (Count II),17 Tortious Interference with the Rental Agreement (Count
III),18 Promissory Estoppel (Count IV),19 and Unjust Enrichment (Count V).20
Everphone’s allegations can be summarized as follows: (1) Go Technology
wrongfully cancelled the Rental Agreement;21 (2) Go Technology wrongfully sent
back working devices;22 and (3) Go Technology refused to pay outstanding invoices
due and other fees and costs.23
Rather than answer the Complaint, Go Technology has moved to dismiss all
five of Everphone’s claims.
First, Go Technology contends that the Complaint should be dismissed
because “the Guaranty contains a Georgia choice of law provision”; or, in the
alternative, that dismissal is warranted under the doctrine of forum non conveniens
in favor of Georgia.24
Second, Go Technology says Counts II through V should be dismissed
17 Id. ¶¶ 80-93. 18 Id. ¶¶ 94-102. 19 Id. ¶¶ 103-10. 20 Id. ¶¶ 111-20. 21 Id. ¶ 53. 22 Id. ¶¶ 54-55. 23 Id. ¶¶ 64, 68-70. 24 Def.’s Open. Br. at 6-8 (D.I. 5). Everphone, Inc. v. Go Technology Management, LLC C.A. No. N23C-03-022 PRW CCLD November 17, 2023 Page 6 of 27
because the entirety of the parties’ relationship is governed by contract, so
Everphone’s separate tort claims are barred.25
Last, Go Technology asserts that: (1) Everphone’s fraud claim (Count II) is
not pled with particularity and the presence of a merger provision bars it;26
(2) its tortious interference claim (Count III) fails “because [Everphone] does not
allege Go Technology acted with malice and intent to injure [Everphone] and
Go Technology is not a stranger to the rental agreement between EBF and
[Everphone];”27 and, (3) the unjust enrichment (Count V28) is doomed because there
is a valid contract.29
25 Id. at 9-10 (invoking, among other things, the economic loss rule). 26 Id. at 12-16. 27 Id. at 16-19. 28 Go Technology erroneously names Count IV as the unjust enrichment claim. Id. at 19. But it is Count V that alleges unjust enrichment, while Count IV avers that relief is due by application of promissory estoppel. Compl. ¶¶ 111-20 (identifying unjust enrichment as Everphone’s fifth cause of action); id. at 103-10 (identifying promissory estoppel as Everphone’s fourth cause of action). Notwithstanding this misnomination (and failure to more expressly call out the promissory estoppel theory), it is clear from Go Technology’s papers and argument that it seeks dismissal of both on the same bases. See, e.g., Def.’s Open. Br. at 9-11. 29 Def.’s Open. Br. at 19. Everphone, Inc. v. Go Technology Management, LLC C.A. No. N23C-03-022 PRW CCLD November 17, 2023 Page 7 of 27
II. APPLICABLE LEGAL STANDARDS
A. DISMISSAL FOR IMPROPER VENUE
This Court’s Civil Rule 12(b)(3) governs a motion to dismiss for improper
venue.30 A reviewing court “must assume as true all the facts pled in the complaint
and view those facts and all reasonable inferences drawn from them in the light most
favorable to the plaintiff.”31 The Court “is not shackled to the plaintiff’s complaint
and is permitted to consider extrinsic evidence from the outset.”32 A dismissal
motion may be granted “before the commencement of discovery on the basis of
affidavits and documentary evidence if the plaintiff cannot make out a prima facie
case in support of its position.”33
When considering such a motion, the Court must “give effect to the terms of
private agreements to resolve disputes in a designated judicial forum out of respect
for the parties’ contractual designation.”34 And “[i]f a forum selection clause validly
limits a plaintiff to a single forum, that clause operates to divest a court that
30 Del. Super. Ct. Civ. R. 12(b)(3). 31 Loveman v. Nusmile, Inc., 2009 WL 847655, at *2 (Del. Super. Ct. Mar. 31, 2009) (citation omitted). 32 Id. (citation omitted). 33 Id. (citation omitted). 34 Id. at *3 (citation omitted). Everphone, Inc. v. Go Technology Management, LLC C.A. No. N23C-03-022 PRW CCLD November 17, 2023 Page 8 of 27
otherwise has jurisdiction of its status as a proper venue for the plaintiff to sue.”35
B. DISMISSAL FOR FAILURE TO STATE A CLAIM
“Under Superior Court Civil Rule 12(b)(6), the legal issue to be decided is,
whether a plaintiff may recover under any reasonably conceivable set of
circumstances susceptible of proof under the complaint.”36 Under that rule, the Court
will:
(1) accept all well pleaded factual allegations as true, (2) accept even vague allegations as “well pleaded” if they give the opposing party notice of the claim, (3) draw all reasonable inferences in favor of the non-moving party, and (4) not dismiss the claims unless the plaintiff would not be entitled to recover under any reasonably conceivable set of circumstances.37
“If any reasonable conception can be formulated to allow Plaintiffs’ recovery, the
motion must be denied.”38 Put simply, “[d]ismissal is warranted [only] where the
plaintiff has failed to plead facts supporting an element of the claim, or that under
no reasonable interpretation of the facts alleged could the complaint state a claim for
which relief might be granted.”39
35 Simon v. Navellier Series Fund, 2000 WL 1597890, at *6 (Del. Ch. Oct. 19, 2000). 36 Vinton v. Grayson, 189 A.3d 695, 700 (Del. Super. Ct. 2018) (quoting Super. Ct. Civ. R. 12(b)(6)). 37 Id. (quoting Central Mortgage Co. v. Morgan Stanley Mortgage Cap. Hldgs. LLC, 27 A.3d 531, 535 (Del. 2011)). 38 Id. (citing Central Mortgage, 27 A.3d at 535). 39 Hedenberg v. Raber, 2004 WL 2191164, at *1 (Del. Super. Ct. Aug. 20, 2004). Everphone, Inc. v. Go Technology Management, LLC C.A. No. N23C-03-022 PRW CCLD November 17, 2023 Page 9 of 27
As just mentioned, ordinarily at the motion to dismiss stage the Court must
accept as true all of a plaintiff’s well-pleaded facts and draw all reasonable
inferences in her favor.40 “But on a motion to dismiss an action for forum non
conveniens, this Court exercises its sound discretion when making findings of fact
and drawing conclusions therefrom based on that supported by the record; the Court
must, when doing so, use an orderly and logical deductive process.”41
C. FRAUD CLAIMS
This Court’s Civil Rule 9(b) requires a plaintiff to plead fraud with
particularity.42 And to state a claim for fraud, a plaintiff must allege that:
(1) the defendant falsely represented or omitted facts that the defendant had a duty to disclose; (2) the defendant knew or believed that the representation was false or made the representation with a reckless indifference to the truth; (3) the defendant intended to induce the plaintiff to act or refrain from acting; (4) the plaintiff acted in justifiable reliance on the representation; and (5) the plaintiff was injured by its reliance.43
40 GXP Capital, LLC v. Argonaut Mfg. Servs., Inc., 234 A.3d 1186, 1192-93 (Del. Super. Ct. 2020), aff’d, 253 A.3d 93 (Del. 2021) (listing cases). 41 Id. at 1193 (citing Williams Gas Supply Co. v. Apache Corp., 594 A.2d 34, 37 (Del. 1991)). 42 Yu v. GSM Nation, LLC, 2018 WL 2272798, at *19 (Del. Super Ct. Apr. 24, 2018) (“Although Delaware is a notice pleading jurisdiction, Superior Court Civil Rule 9(b) requires a plaintiff to plead actual fraud with particularity. ‘Rule 9(b) does not require an exhaustive cataloguing of facts but on sufficient factual specificity to provide assurance that the plaintiff has investigated [...] the alleged fraud and reasonably believes that a wrong has occurred.’”) (internal citations omitted). 43 DCV Hldgs., Inc. v. ConAgra, Inc., 889 A.2d 954, 958 (Del. 2005). Everphone, Inc. v. Go Technology Management, LLC C.A. No. N23C-03-022 PRW CCLD November 17, 2023 Page 10 of 27
III. DISCUSSION
A. THE GUARANTY’S PERMISSIVE FORUM SELECTION CLAUSE DOESN’T REQUIRE THAT THIS ACTION BE BROUGHT IN GEORGIA.
Pointing to the Guaranty’s Paragraph 18, Go Technology insists that “the
Guaranty contains a Georgia forum selection clause” that prohibits suit here.44 That
paragraph, titled “Consent to Jurisdiction; Service of Process” states:
Guarantor agrees and consents to the jurisdiction and venue of any state, superior or federal court sitting in or having jurisdiction over the Dekalb County, Georgia or Cobb County, Georgia with respect to any legal action, proceeding, or dispute between them and hereby expressly waives any and all rights under applicable law or in equity to object to the jurisdiction and venue of said courts. Guarantor further irrevocably consents to service of process by certified mail, return receipt requested, to the address of the Guarantor identified below or by any other means permitted by Georgia law or the Federal Rules of Civil Procedure. Guarantor so served shall appear or answer to any summons and complaint or other process and should Guarantor so served fail to appear or answer within the time period proscribed by the law of the jurisdiction where such action was commenced, said Guarantor shall be deemed in default and judgment may be entered by Everphone against the said party for the amount as demanded in any summons and complaint or other process so served.45
Go Technology acknowledges that the provision is not mandatory but insists
44 Def.’s Open. Br. at 6-7. 45 Guaranty ¶ 18. Everphone, Inc. v. Go Technology Management, LLC C.A. No. N23C-03-022 PRW CCLD November 17, 2023 Page 11 of 27
the Court should enforce it as though it were.46 As support, Go Technology turns to
In re Bay Hills Emerging Partners, I, L.P.47, saying there the Court of Chancery
“enforce[d] the permissive forum selection clause at issue by staying the Delaware
action in favor” of another forum.48 But Go Technology’s ignores the Bay Hills
court’s explicit rejection of those defendants’ attempt to “specifically enforce” what
it found to be only a permissive forum selection clause—the court instead stayed
that action in the interest of comity and judicial efficiency.49
Unlike a mandatory forum selection clause—which deems a certain forum
exclusive—a permissive forum selection clause expands jurisdiction to a certain
forum that may or may not have had jurisdiction without the contractual provision.50
Go Technology’s attempt to use the Guaranty’s permissive forum selection clause
to bind Everphone to Georgia fails.
B. DISMISSAL FOR FORUM NON CONVENIENS ISN’T WARRANTED.
Even if suit in Georgia is not required, Go Technology suggests Everphone’s
complaint should be dismissed under the doctrine of forum non conveniens in favor
46 Def. Repl. Br. at 3 (D.I. 14). 47 2018 WL 3217650 (Del. Ch. July 2, 2018). 48 Def. Repl. Br. at 3. 49 In re Bay Hills Emerging P’rs, I, 2018 WL 3217650, at *6-7. 50 Id. at *5. Everphone, Inc. v. Go Technology Management, LLC C.A. No. N23C-03-022 PRW CCLD November 17, 2023 Page 12 of 27
of Georgia.51 Unsurprisingly, Everphone disagrees.52
A motion raising forum non conveniens is a request that the Court, though
possessing both personal and subject matter jurisdiction over an action, nevertheless
decline to hear it.53 In analyzing a motion to dismiss an action for forum non
conveniens, the Court applies the well-known Cryo-Maid factors:
(1) the relative ease of access to proof; (2) the availability of compulsory process for witnesses; (3) the possibility of the view of the premises, if appropriate; (4) all other practical problems that would make the trial of the case easy, expeditious and inexpensive; (5) whether or not the controversy is dependent upon the application of Delaware law which the courts of this State more properly should decide than those of another jurisdiction; and (6) the pendency or nonpendency of a similar action in another jurisdiction.54
Because this is the first-filed and only action, Go Technology must demonstrate
overwhelming hardship to gain dismissal here.55
Under the first factor (the relative ease of access to proof) and second factor
(availability of compulsory process for witnesses), Go Technology says that because
51 Def.’s Open. Br. at 7-8. 52 Pltf.’s Ans. Br. at 11 (D.I. 12). 53 GXP Capital, 234 A.3d at 1193. 54 Gramercy Emerging Mkts. Fund v. Allied Irish Banks, P.L.C., 173 A.3d 1033, 1036-37 (Del. 2017) (cleaned up) (outlining the now well-accepted factors derived from General Foods Corp. v. Cryo-Maid, Inc., 198 A.2d 681 (Del. 1964) and its progeny). 55 Sperling & Slater v. SilkRoad, Inc., 2022 WL 16910563, at *4 (Del. Super. Ct. Nov. 14, 2022). Everphone, Inc. v. Go Technology Management, LLC C.A. No. N23C-03-022 PRW CCLD November 17, 2023 Page 13 of 27
its principal place of business is Georgia, “Everphone’s principal place of business
is next door to Georgia, in Florida,” and “[t]he underlying transaction had no
connection to Delaware” that the first two Cryo-Maid factors favor Georgia.56
Everphone counters that because “[d]ocuments were exchanged electronically and
by mail and the necessary proof in this case can be transmitted the same way,” the
first factor weighs equally in favor of Delaware.57 Additionally, Everphone suggests
that while some witnesses are presumably in Georgia, others are located across the
country, so the compulsory process factor does not favor dismissal here.58
Go Technology says that nothing related to this case happened in Delaware.59
Maybe so. But that’s not the test and is hardly unusual in a commercial lawsuit
brought in a Delaware court. To gain any traction on the road toward dismissal, Go
Technology must “make a particularized showing that witnesses, documents, or
other evidence necessary to defend the allegations contained in [Everphone]’s
complaint cannot be brought to or otherwise produced in Delaware.”60 Go
56 Def.’s Open. Br. at 8. 57 Pltf.’s Ans. Br. at 14. 58 Id. (“While Go Technology’s witnesses are likely in Georgia, Everphone’s are in Florida and elsewhere, and third-party witnesses (i.e., EBF, Hyundai, and AT&T) are in any number of other states.”). 59 See Def. Open. Br. at 8-9. 60 Mar-Land Indus. Contrs., Inc. v. Caribbean Petro. Refining, L.P., 777 A.2d 774, 781 (Del. 2001) Everphone, Inc. v. Go Technology Management, LLC C.A. No. N23C-03-022 PRW CCLD November 17, 2023 Page 14 of 27
Technology hasn’t done that.
Relatedly, under the compulsory process factor, Go Technology must show
that “another forum would provide a substantial improvement as to the number of
witnesses who would be subject to compulsory process.”61 While many witnesses
may be located outside of Delaware, they appear equally to be located without
Georgia. Go Technology’s protestation that Georgia is closer to Everphone’s
principal place of business (Florida) is of no help; this particular factor focuses on
compulsory process (or lack thereof), not relative ease of travel.
In sum, the Go Technology has failed to carry its burden on the first and
second factors.62
Both parties seem to concede that the third Cryo-Maid factor (view of the
premises) plays no part here.63
Under the fourth factor (practical problems), the Court looks at “practical
problems that would make the trial of the case easy, expeditious and inexpensive.”64
61 Mt. Hawley Ins. Co. v. Jenny Craig, Inc., 668 A.2d 763, 769 (Del. Super. Ct. 1995) (citation omitted). 62 See Mar-Land Indus. Contrs., Inc., 777 A.2d at 778 (“A plaintiff seeking to litigate in Delaware is afforded the presumption that its choice of forum is proper and a defendant who attempts to obtain dismissal based on grounds of forum non conveniens bears a heavy burden.” (citations omitted)). 63 Def. Open. Br. at 9; see Pltf.’s Ans. Br. at 11-16 (omitting any reference to factor three). 64 Gramercy, 173 A.3d at 1036-37 (citation and quotation marks omitted). Everphone, Inc. v. Go Technology Management, LLC C.A. No. N23C-03-022 PRW CCLD November 17, 2023 Page 15 of 27
Neither party devotes much time to this consideration. Go Technology argues
simply that the “practical problems” factor weighs in its favor because “Georgia is
an alternative available forum.”65
There is little to no weight to be ascribed to this factor in this instance. Like
expenses will be incurred by the parties wherever the litigation takes place—
Everphone is based in Florida; Go Technology is based in Georgia; and potential
witnesses are located across the country.
The fifth factor centers on “whether the controversy is dependent upon the
application of Delaware law which the courts of this State more properly should
decide than those of another jurisdiction.”66 In Martinez v. E.I. DuPont de Nemours
and Co., Inc., our Supreme Court explained:
If, as our jurisprudence holds, significant weight should be accorded the neutral principle that important and novel issues of Delaware law are best decided by Delaware courts, then it logically follows that our courts must acknowledge that important and novel issues of other sovereigns are best determined by their courts where practicable.67
Go Technology says the fifth factor weighs in its favor because “Georgia law
65 Def. Open. Br. at 9. 66 Martinez v. E.I. DuPont de Nemours and Co., Inc., 86 A.3d 1102, 1109 (Del. 2014) (citing Cryo-Maid, 198 A.2d at 684). 67 Id. at 1109-10 (internal citations omitted). Everphone, Inc. v. Go Technology Management, LLC C.A. No. N23C-03-022 PRW CCLD November 17, 2023 Page 16 of 27
will be applied.”68 Everphone says the fifth factor weighs in its favor because
Delaware law applies to four of its five claims, but even if it didn’t, this Court can
easily apply Georgia law to resolve this contract fight.69
Neither party disputes that, at the very least, the breach-of-contract claim
(Count I) must be decided under Georgia law. Even assuming Georgia law applies
to the others, there is no serious suggestion that some “important or novel” issue of
that state’s law is to be resolved here. Every day, Delaware’s business courts apply
foreign jurisdictions’ laws in commercial cases. Such a run-of-the-mill exercise
does not compel, or even favor, dismissal.70
Under the sixth factor the Court considers whether there are pending actions
in another jurisdiction. “The absence of another pending litigation weighs
significantly against granting a forum non conveniens motion.”71 This factor, while
not dispositive, is significant and is only overcome “in the most compelling
circumstances.”72 Without another suit pending in another jurisdiction, Everphone
68 Mot. to Dismiss at 9. 69 Answering Br. at 13. 70 See Berger v. Intelident Solutions, Inc., 906 A.2d 134, 137 (Del. 2006) (finding application of foreign law alone insufficient to dismiss an action under forum non conveniens). 71 Id. (citing cases). 72 Id. Everphone, Inc. v. Go Technology Management, LLC C.A. No. N23C-03-022 PRW CCLD November 17, 2023 Page 17 of 27
would essentially be forced “to start anew” if a dismissal were granted.73
Given the above and the overwhelming hardship standard required to gain
dismissal of a first-filed Delaware action over which this Court undoubtedly has
jurisdiction, Go Technology comes nowhere near carrying its required burden.74
The prayer to dismiss for forum non conveniens must be denied.
C. THE COURT EVALUATES COUNTS II—V UNDER BOTH DELAWARE AND GEORGIA LAW.
Go Technology posits that because the Guaranty contains a Georgia choice-
of-law clause75 that Everphone’s tort claims should be governed by Georgia law.76
Everphone says that Delaware law should apply because the tort claims concern the
Rental Agreement and that has a Delaware choice-of-law provision.77 But neither
party engaged a particularly helpful or thorough choice-of-law analysis, so the Court
73 Parvin v. Kaufmann, 236 A.2d 425, 427 (Del. 1967). 74 In re CVS Opioid Insurance Litigation, 2022 WL 3330427, at *7 (Del. Supr. Ct. Aug. 12, 2022) (“The Court’s focus is, and must be, vel non the defendants have established that they will suffer overwhelming hardship by litigating . . . in Delaware.”) (quoting In re Asbestos Litig., 929 A.2d 373, 388 (Del. Super. Ct. 2006)). 75 Guaranty § 14 (“This Guaranty shall be deemed to be a contract entered into pursuant to the laws of the State of Georgia and shall in all respects be governed, construed, applied and enforced in accordance with applicable federal law and the laws of the State of Georgia, without giving effect to any conflict of laws principles.”). 76 Def.’s Open. Br. at 6; In its Reply Brief, Go Technology says that “[e]ven under Delaware law . . . [Everphone]’s Counts II – V fail.” Def. Repl. Br. at 7-8. 77 Pltf.’s Ans. Br. at 7-8; id. at 21 (“Counts II-V relate to the Agreement between Everphone and EBF, which contains a Delaware choice of law clause.”). Everphone, Inc. v. Go Technology Management, LLC C.A. No. N23C-03-022 PRW CCLD November 17, 2023 Page 18 of 27
examines Counts II through V under both of Delaware or Georgia law because each
of those claims, as pled, may indeed be focused on a different instrument.78
D. EVERPHONE’S FRAUD CLAIM (COUNT II) SURVIVES DISMISSAL.
In Count II, Everphone charges that Go Technology committed fraud by
making false representations to Everphone to induce it to enter into the Rental
Agreement, including among other things, “Go Technology’s intention to guaranty
payments owed to Everphone under the [Rental] Agreement”79
Go Technology insists the fraud claim should be dismissed because “the
parties’ relationship is governed by a contract” (i.e., the Guaranty) and so that claim
is “barred by the economic loss rule.”80 Go Technology submits also that Everphone
fails to plead its fraud claim with sufficient particularity and that the presence of a
merger provision in the Guaranty bars that claim.81 Go Technology’s focus on just
the Guaranty and Georgia law is purposeful82—but misdirected.
78 See generally Laugelle v. Bell Helicopter Textron, Inc., 2013 WL 5460164, at *3 (Del. Super. Ct. Oct. 1, 2013) (noting that “[c]hoice-of-law determinations must be made as to each issue when presented, not to the case as a whole.”). 79 Compl. ¶ 86. 80 Def.’s Open. Br. at 9-10. 81 Id. at 12-16. 82 Under Georgia law, one alleging fraudulent inducement can either: “(1) affirm the contract and sue for damages from the fraud or breach; or (2) promptly rescind the contract and sue in tort for fraud.” Ekeledo v. Amporful, 642 S.E.2d 20, 22 (Ga. 2007) (citation omitted). Where a Georgia plaintiff omits a recessionary claim and instead “affirms a contract which contains a merger or Everphone, Inc. v. Go Technology Management, LLC C.A. No. N23C-03-022 PRW CCLD November 17, 2023 Page 19 of 27
To plead fraud under this Court’s Civil Rule 9(b), one must state with some
particularity83 “the time, place, and contents of the false representations; the facts
misrepresented; the identity of the person(s) making the misrepresentation; and what
that person(s) gained from making the misrepresentation.”84 And, as a general
matter, the elements of a fraud claim are:
(1) a false representation, usually one of fact, made by the defendant; (2) the defendant’s knowledge or belief that the representation was false, or was made with reckless indifference to the truth;
disclaimer provision and retains the benefits, he is estopped from asserting that he relied upon the other party’s misrepresentation and his action for fraud must fail.” Id. (citation omitted). Here, the Guaranty has a merger clause. Guaranty ¶ 12 (“All prior agreements, understandings, representations and communications between the parties, whether oral or written, with respect to this Guaranty are merged into this Guaranty which alone and completely expresses the agreement of Guarantor and Everphone.”). And Everphone has not sought rescission but sued to enforce the Guaranty. So, if the fraud claim must indeed focus only on the existence of the Guaranty and— more importantly—mere non-performance thereunder, Everphone’s fraud claim might be in peril were Georgia law to be applied here. 83 Del. Super. Ct. Civ. R. 9(b) (“Pleading special matters-Fraud, negligence, mistake, condition of mind—“In all averments of fraud . . . , the circumstances constituting fraud . . . shall be stated with particularity.”). See Chaplake Hldgs., LTD v. Chrysler Corp., 766 A.2d 1, 5 (Del. 2001) (“As a general rule, the law of the forum governs procedural matters.”); Monsanto Co. v. Aetna Cas. and Sur. Co., 1994 WL 317557, at *4 (Del. Super. Ct. Apr. 15, 1994) (“The only exception to this [general rule] occurs when the procedural law of the foreign state is ‘so inseparably interwoven with substantive rights as to render a modification of the foregoing rule necessary, lest a party be thereby deprived of his legal rights.’”) (quoting Connell v. Delaware Aircraft Ind., 55 A.2d 637, 640 (Del. Super. Ct. 1947). 84 Avve, Inc. v. Upstack Techs., Inc., 2019 WL 1643752, at *5 (Del. Super. Ct. Apr. 12, 2019) (observing that Rule 9(b) “deviates from the [short and plain statement (‘notice pleading’)] rule and imposes a heightened pleading standard for fraud”). Everphone, Inc. v. Go Technology Management, LLC C.A. No. N23C-03-022 PRW CCLD November 17, 2023 Page 20 of 27
(3) an intent to induce the plaintiff to act or to refrain from acting; (4) the plaintiff’s action or inaction taken in justifiable reliance upon the representation; and (5) damage to the plaintiff as a result of such reliance.85
When distinguishing fraud and breach-of-contract claims, one generally looks to the
timing of the alleged misconduct to determine whether the inducement to deal is
truly separate and distinct from mere non-performance allegations.86 Here, because
of the false representations or fraud alleged happened pre the Rental Agreement’s
signing,87 it is reasonably conceivable that Go Technology’s acts of inducement
were calculated to obtain that signing.88 And Everphone’s fraud claim is not lacking
in the needed particulars.89 Considering the fraud count as a whole, it no doubt
alleges “the circumstances of the fraud with detail sufficient to apprise [Go
Technology] of the basis for the claim.”90 Accordingly Everphone’s fraud claim—
85 E.I. DuPont de Nemours & Co. v. Fla. Evergreen Foliage, 744 A.2d 457, 461-62 (Del. 1999). 86 See Pilot Air Freight, LLC v. Manna Freight Sys., Inc., 2020 WL 5588671, at *26 (Del. Ch. Sept. 18, 2020) (observing that such separate fraudulent inducement claims are permissible “when the [pled] conduct occurs prior to the execution of the contract and ‘thus with the goal of inducing the plaintiff’s signature and willingness to close on the bargain.’” (quoting In re Bracket Holding Corp. Litig., 2017 WL 3283169, at *18-19 (Del. Super. Ct. July 31, 2017))). 87 Compl. ¶¶ 81-87, 89. 88 See Pilot Air, 2020 WL 5588671, at *26; In re Bracket Holding, 2017 WL 3283169, at *18- 19. 89 Compl. ¶¶ 81-87, 89. 90 ABRY P’rs V, L.P. v. F&W Acq. LLC, 891 A.2d 1032, 1050 (Del. Ch. 2006). Everphone, Inc. v. Go Technology Management, LLC C.A. No. N23C-03-022 PRW CCLD November 17, 2023 Page 21 of 27
i.e. that it was induced to enter the Rental Agreement not only by the Guaranty but
by other misrepresentations by Go Technology meant to convince Everphone to
sign–Count II survives this pleading-stage attack under Delaware law.
E. EVERPHONE FAILS TO SUFFICIENTLY PLEAD TORTIOUS INTERFERENCE WITH THE RENTAL AGREEMENT (COUNT III).
In Count III Everphone alleges Go Technology tortiously interfered with its
Rental Agreement with EBF by “declar[ing], unilaterally and without authority, that
neither Go Technology nor EBF would perform their obligations under the
Agreement and the Guaranty.”91
Go Technology says Count III fails “because [Everphone] does not allege Go
Technology acted with malice and intent to injure [Everphone] and Go Technology
is not a stranger to the rental agreement between EBF and [Everphone].”92
Everphone never alleges bad faith or malice related to the alleged tortious
interference (even generally) in its Complaint. The closest Everphone comes is
labeling Go Technology’s interference as “unauthorized and unlawful.”93 But that’s
not enough. So, Everphone has failed to satisfy a pleading element required under
91 Compl. ¶ 95. 92 Id. at 16. 93 Compl. ¶ 100. Everphone, Inc. v. Go Technology Management, LLC C.A. No. N23C-03-022 PRW CCLD November 17, 2023 Page 22 of 27
both Delaware94 and Georgia95 law in its tortious interference with a contractual
relationship claim and Count III must be dismissed.
F. EVERPHONE’S PROMISSORY ESTOPPEL CLAIM IS BARRED UNDER GEORGIA AND DELAWARE LAW (COUNT IV).
As to Count IV (promissory estoppel), it again appears Go Technology would
suggest dismissal is warranted because “Everphone’s purported tort claims arise
from the parties’ contract and are barred by the economic loss rule.”96
Everphone says its “promissory estoppel claim is an equitable claim based on
Go Technology’s promise to pay for all amounts owed to Everphone under the
Agreement with EBF, which include the losses Everphone suffered, and extend far
beyond the amounts invoiced for 5,465 devices under the Guaranty.”97 In
94 Skye Mineral Investors, LLC v. DXS Capital (U.S.) Limited explains that when “the alleged interference comes from individuals or entities that share common ‘economic interests’ with a party to the contract, plaintiffs must ‘demonstrate that an interference by an affiliated entity was motivated by some malicious or other bad faith purpose.’” 2020 WL 881544, at *33 (Del. Ch. Feb. 24, 2020) (quoting AM Gen. Hldgs. LLC v. Renco Gp., Inc., 2013 WL 5863010, at *12 (Del. Ch. Oct. 31, 2013)). From the facts alleged, Go Technology surely shares a common economic interest with Everphone and EBF. And thus, there must be an allegation and showing of malice or bad faith. See Bhole, Inc. v. Shore Investments, Inc., 67 A.3d 444, 453 (Del. 2013) (“Thus, to establish a tortious interference with its Lease, [the interfered-with party] must show that [the interferer], acted maliciously or in bad faith.”). 95 Tidikis v. Network for Medical Commc’ns & Research, LLC, 619 S.E.2d 481, 486 (Ga. Ct. App. 2005) (under Georgia law, malice is a required element for tortious interference with a contract). 96 Def.’s Open. Br. at 2. 97 Pltf.’s Ans. Br. at 19. Everphone, Inc. v. Go Technology Management, LLC C.A. No. N23C-03-022 PRW CCLD November 17, 2023 Page 23 of 27
Everphone’s view, its “promissory estoppel claim seeks equitable relief based on
promises Go Technology made to Everphone regarding the number of devices that
would be purchased from Everphone and that Everphone would receive full payment
for its services.”98 Accordingly, it says the “promises [made] were broader than the
promises set forth in the Guaranty as are Everphone’s damages.”99
In Alltrista Plastics, LLC v. Rockline Industries,100 this Court cautioned that
promissory estoppel “appl[ies] only if the contract governs other aspects of the
parties’ relationship and not when the relied-upon promises were incorporated into
the contract.”101 In turn, “courts must be careful that they do not apply the doctrine
of promissory estoppel when there is an existing contract that governs the issue
before the Court.”102 This is also true under Georgia law.103
Here, the Rental Agreement requires EBF to purchase a minimum of
98 Id. at 21-22. 99 Id. 100 2013 WL 5210255 (Del. Super. Ct. Sept. 4, 2013). 101 Id. at *9 (citation omitted). 102 Id. (citations omitted). 103 Adkins v. Cagle Foods JV, LLC, 411 F.3d 1320, 1326 (11th Cir. 2005) (finding that under Georgia law, “where a plaintiff seeks to enforce an underlying contract which is reduced to writing, promissory estoppel is not available as a remedy” (citing Bank of Dade v. Reeves, 354 S.E.2d 131 (Ga. 1987)). Everphone, Inc. v. Go Technology Management, LLC C.A. No. N23C-03-022 PRW CCLD November 17, 2023 Page 24 of 27
60,000 devices,104 for “an initial deposit of $39.99 per Device monthly” along with
other fees and costs.105 And the Guaranty provides that: “Guarantor hereby
irrevocably, absolutely and unconditionally guarantees to Everphone the full and
prompt payment when due of the rent and any other sum of money due under the
Rental Agreement . . . .”106 So Everphone’s promissory estoppel claim is governed
by the Guaranty (and the Rental Agreement). Accordingly, Count IV fails as some
separate standalone claim.
G. EVERPHONE’S UNJUST ENRICHMENT CLAIM IS BARRED UNDER GEORGIA AND DELAWARE LAW (COUNT V).
On unjust enrichment (Count V), Go Technology repeats: it should be
dismissed because “the parties’ relationship is governed by a [valid] contract” so this
“tort claim[] . . . [is] barred by the economic loss rule.”107
Everphone suggests the unjust enrichment claim should survive Everphone’s
dismissal motion because, in its view, the Guaranty “does not address all of the
benefits Everphone conferred upon Go Technology.”108
104 Rental Agreement at 2 (“EBF hereby enters into a rental agreement for a minimum of 60,000 Devices”). 105 Id. 106 Guaranty § 1. 107 Def.’s Open. Br. at 9-10, 19. 108 Pltf.’s Ans. Br. at 33. Everphone, Inc. v. Go Technology Management, LLC C.A. No. N23C-03-022 PRW CCLD November 17, 2023 Page 25 of 27
At its most specific, Everphone says its “unjust enrichment claim is based on
Go Technology’s retention of 5,465 devices (and related services) that have not been
paid for.”109 The Guaranty provides that Go Technology “irrevocably, absolutely
and unconditionally guarantees to Everphone the full and prompt payment when due
of the rent and any other sum of money due under the Rental Agreement . . . .”110
Here again, Alltrista Plastics is instructive; there the Court explained “[a]
claim for unjust enrichment is not available if there is a contract that governs the
relationship between parties that gives rise to the unjust enrichment claim.”111
“Thus, ‘[w]hen the complaint alleges an express, enforceable contract that controls
the parties’ relationship . . . , a claim for unjust enrichment will be dismissed.”112
The same under Georgia law.113
To Everphone, its “unjust enrichment claim is not based on the Guaranty”
alone but rather is “based on Go Technology’s retention of benefits that have not
109 Id. at 19. 110 Guaranty § 1. 111 2013 WL 5210255, at *11 (alteration in original) (quoting Kuroda v. SPJS Hldgs., L.L.C., 971 A.2d 872, 891 (Del. Ch. 2009)). 112 Id. (alteration in original) (quoting Bakerman v. Sidney Frank Importing Co., Inc., 2006 WL 3927242, at * 18 (Del. Ch. Oct. 10, 2006)). 113 Tidikis, 619 S.E.2d at 485 (finding that, under Georgia law, when a contract governs the dispute, and the validity of that contract is not being challenged, an unjust enrichment claim fails as a matter of law). Everphone, Inc. v. Go Technology Management, LLC C.A. No. N23C-03-022 PRW CCLD November 17, 2023 Page 26 of 27
been paid for, which Go Technology received from Everphone through the
overarching business relationship between EBF, Go Technology, and
Everphone.”114 But Go Technology’s alleged “retention of benefits”—i.e., the
“5,465 devices (and related services) that have not been paid”—is exactly what the
Rental Agreement and Guaranty cover.
If there is something more, its absent from the Complaint and has been no
better identified or explained during these dismissal proceedings. Accordingly,
Everphone fails to sufficiently plead its unjust enrichment claim under either
Delaware or Georgia law and Count V must be dismissed.
H. THE WONT TO PLEAD IN THE ALTERNATIVE CANNOT SAVE EVERPHONE’S PROMISSORY ESTOPPEL OR UNJUST ENRICHMENT CLAIMS.
Everphone insisted at argument that its promissory estoppel and unjust
enrichment claims were alternatively pled and should survive dismissal on that basis
alone. But just because unjust enrichment or promissory estoppel may sometimes
be pled in the alternative to a breach-of-contract claim does not mean they will
inexorably always survive dismissal.115 The Court instead looks to whether there is
114 Pltf.’s Ans. Br. at 34. 115 BAE Sys. Info. & Elec. Sys. Integration, Inc. v. Lockheed Martin Corp., 2009 WL 264088, at *8 (Del. Ch. Feb. 3, 2009) (“In some instances, both a breach-of-contract and an unjust enrichment claim may survive a motion to dismiss when pled as alternative theories for recovery. Such occurrences are factually distinguishable, however, and, more importantly, do not stand for the proposition that an unjust enrichment claim must survive a motion to dismiss when pled Everphone, Inc. v. Go Technology Management, LLC C.A. No. N23C-03-022 PRW CCLD November 17, 2023 Page 27 of 27
an independent basis for the alternatively pled claim.116 And mere resort to “pleading
in the alternative” will not save those cursory tag-alongs from dismissal.117
IV. CONCLUSION
Based on the forgoing, Go Technology’s Motion to Dismiss is DENIED as to
Counts I and II, and GRANTED as to Counts III through V.
IT IS SO ORDERED.
_______________________ Paul R. Wallace, Judge cc: All Counsel via File and Serve
alternatively with a contract claim that will move beyond the motion to dismiss stage.” (emphasis in original) (internal citation omitted)). 116 Id. 117 Id. (“A right to plead alternative theories does not obviate the obligation to provide factual support for each theory.”).