IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
TROY VENTURES, LLC, ) SECURENETMD, LLC, ) THINKSECURENET, LLC, and ) DEMARVAREPAIR LLC, ) ) Plaintiffs, ) ) v. ) C.A. No. N23C-01-183 PAW ) MARK KOSLOSKI, ) ) Defendant. )
Submitted: January 17, 2025 Decided: April 21, 2025
MEMORANDUM OPINION
Upon consideration of Plaintiffs’ Partial Motion for Summary Judgment;
GRANTED.
Upon consideration of Defendant’s Motion for Partial Summary Judgment;
DENIED, in part and GRANTED, in part.
Daniel McAllister, Esq., of McAllister Firm LLC, Attorney for Plaintiffs.
Daniel Herr, Esq., of the Law Office of Daniel C. Herr LLC, Attorney for Defendant.
WINSTON, J. I. INTRODUCTION
Plaintiffs Troy Ventures LLC; SecureNetMD, LLC; ThinkSecureNet, LLC;
and DemarvaRepair LLC (collectively, “SecureNet” or “Plaintiffs”) initiated this
litigation against a former employee, Defendant Mark Kosloski (“Kosloski”) for
breach of contract (or, in the alternative, promissory estoppel and unjust enrichment).
Kosloski counterclaimed against SecureNet, alleging SecureNet withheld his
commission and final paycheck in violation of the parties’ employment contract and
New Jersey wage payment law.
For the following reasons, the Court GRANTS Plaintiffs’ Partial Motion for
Summary Judgment as to Plaintiffs’ Counts I and II and GRANTS Kosloski’s
Motion for Partial Summary Judgment as to Plaintiffs’ Counts III and IV (for
promissory estoppel and unjust enrichment). The Court DENIES Kosloski’s motion
as to Plaintiffs’ Count II and Kosloski’s Counterclaim Count II.
II. FACTUAL AND PROCEDURAL BACKGROUND
A. RELEVANT FACTS
On or about September 14, 2020, Kosloski and Plaintiffs entered into a
contract governing Kosloski’s employment with Plaintiffs (the “Employment
Agreement”).1 Under the Employment Agreement, the parties agreed that “[i]f
1 Complaint (hereinafter “Compl.”) ¶ 6; see Compl., Ex. A (hereinafter “Employment Agreement”) (D.I. 1). 2 [Kosloski] leaves without providing 45 days written notice, [Kosloski] expressly
agrees to pay [Plaintiffs] $5,000.00 in liquidated damages plus any other damages
available under this agreement and other legal remedies.”2 The agreement also
stated that “[Kosloski] will indemnify and hold [Plaintiffs] harmless from all costs
(including reasonable attorneys[’] fees), damages, and liabilities [Plaintiffs] incur[]
as a result of [Kosloski’s] breach of any provision of this Agreement.”3
On the same day, the parties entered another contract—the Employee
Commission Agreement—in which SecureNet agreed to provide a 6% commission
for new sales generated by Kosloski and a 2% commission for team supervised
sales.4 The Employee Commission Agreement also provided that commission
would be paid to Kosloski on the second pay of each month and that the commission
payouts “shall continue for as long as [SecureNet] continues a relationship with the
client and as long as [Kosloski] continues his … employment with the company.”5
Finally, the Employee Commission Agreement also stated that “[i]t is at
2 Employment Agreement ¶ 2.c. 3 Employment Agreement ¶ 7. 4 Def.’s Ans. and Countercl., Ex. A (hereinafter “Employee Commission Agreement”) at 1 (D.I. 6). 5 Id. 3 [SecureNet’s] discretion if final commission will be paid after the termination of
employment.”6
Approximately four months later, Kosloski and Plaintiffs entered into another
contract reflecting the parties’ agreement to jointly defend against actual or
threatened litigation by Kosloski’s former employer, and the Company agreed to pay
Defense Costs (the “Employee Repayment Agreement”).7 The Employee
Repayment Agreement defined “the Company” as the Plaintiffs SecureNetMD,
ThinkSecureNet, and Troy Ventures, and “Employee” as Kosloski.8 “Defense
Costs” were defined as:
Defense Costs. The Company and Employee have agreed to enter a joint defense arrangement with counsel of the Company’s choosing. For so long as Employee remains employed with the Company and such joint defense arrangement remains in place, the Company agrees to pay all reasonable attorney’s fees incurred in defending the Claims against Employee (the “Defense Costs”).9 The Employment Repayment Agreement included the following section regarding
repayment:
Repayment of Defense Costs. (a) If, within five (5) years after the Employee’s first date of employment with the Company, which was September 14, 2020, (i) Employee voluntarily terminates or gives notice of his intention to voluntarily
6 Id. at 2. 7 Compl. ¶ 11; see Compl., Ex. B (hereinafter “Employee Repayment Agreement”). 8 See Employee Repayment Agreement. 9 Id. ¶ 1. 4 terminate Employee’s employment with the company, or (ii) the Company terminates Employee’s employment for Cause (as defined herein) (each, a “Repayment Event”), Employee hereby agrees that Employee shall repay the Defense Costs to the Company in full within thirty (30) days of Employee’s last date of employment with the Company.10
There was also a provision allowing SecureNet to withhold Kosloski’s final
paycheck to offset repayment of the Defense Costs if a Repayment Event arose. The
provision stated:
Deduction from Final Paycheck; Offset of Other Amounts. In addition to any remedies available to the Company hereunder or otherwise by law, if a Repayment Event occurs and Employee has not repaid the Defense Costs in full by the date on which his final paycheck is payable, Employee hereby authorizes the Company to withhold his final paycheck as partial repayment of the Defense Costs. Employee further acknowledges and agrees that any additional amounts owed by the Company to Employee following termination of Employment may be reduced by the amount of any portion of the Defense Costs not yet repaid by Employee as of the date such amount becomes payable to Employee.11 Under the Employee Repayment Agreement, SecureNet conditionally paid
defense fees for defending against litigation in California brought by Kosloski’s
former employer, Quake Global, Inc. (“Quake”), against Kosloski and SecureNet.12
10 Id. ¶ 2. 11 Id. ¶ 4. 12 Compl. ¶ 17 (“In connection with the [Employee Repayment Agreement], Plaintiffs incurred on Defendant’s behalf Defense Costs totaling $239,558.63.”); see also D.I. 29, Ex. B (Complaint in Quake Global, Inc. v. Mark Kosloski, et al., C.A. 5 On February 16, 2023, Kosloski sent an email to Jack Berberian, SecureNet’s
principal, and Kristen Jackson, the Director of Human Resources and Accounting,
which stated, “Regretfully, I intend to resign from Secure[N]et at the end of this
week” (the “Resignation Email”).13 In his Resignation Email, Kosloski provided the
following bases: “I am surprised that after a week and half, the company hasn’t
extended a counteroffer to retain me. I wanted SecureNet to have the opportunity to
match a competitive and reasonable offer. … Furthermore, we discussed my
frustration with the commission plan.”14 Kosloski shared the following frustrations
with his commission plan: (1) he was expected to close double the sales compared
to his other team members; (2) his commission rate was lower than other rates within
the company; (3) unpaid commissions; and (4) he was not given notice that
exclusions would apply to “direct sales.”15
In response, that same day, Jackson sent a letter to Kosloski advising that
Kosloski was responsible for repayment of Defense Costs under the Employee
Repayment Agreement (the “Repayment Letter”).16 Kosloski responded that he did
No. 37-2020-00040730-CU-BC-CTL, filed in the Superior Court of the State of California for the County of San Diego, Central Division). 13 Pls.’ Partial Mot. for Summ. J., Ex. 1 at 2 (D.I. 25). 14 Pls.’ Partial Mot. for Summ. J., Ex. 1 at 2. 15 Id. 16 Pls.’ Partial Mot. for Summ. J., Ex. 1 at 1. 6 not authorize deductions or withholding from his final paycheck and asserted that
no outstanding sum was owed to Plaintiffs.17 Kosloski also requested that his final
paycheck include the unpaid commissions owed to him.18 SecureNet withheld
$10,038.49 from Kosloski’s final paycheck as “partial repayment” of the Defense
Costs.19
At his deposition, Kosloski was questioned about his state of mind when he
sent the Resignation Email. Kosloski was asked: “So when you wrote this email,
what were you saying in your mind as far as when you intended to resign? It was
the end of the following week?”20 Kosloski responded: “I didn’t actually have the
intent to resign, I was hoping to create urgency in a response from them and to
receive a counteroffer for continued employment. That was my intent.”21
Kosloski also testified that he received a notice of termination email one week
after sending his Resignation Email.22 Kolsoski acknowledged receiving the
17 Id. 18 Id. 19 Compl. ¶¶ 19, 40. 20 Pls.’ Partial Mot. for Summ. J., Ex. 3 (“Kosloski Dep.”) 83:3-6. 21 Kosloski Dep. 83:7-12. 22 Kosloski Dep. 84:9-15. Kosloski clarified that this notice was distinct from the Repayment Letter, stating that he had received “an email from [the Director of Human Resources and Accounting] saying that [Kosloski] was terminated” which was sent approximately one week after February 16. See Kosloski Dep. 84:15-23. 7 Repayment Letter, which referred to his resignation;23 however, he did not view his
employment as being terminated at that time, because: (1) the Repayment Letter did
not “explicitly direct [Kosloski] that [his] employment was terminated on the 16th”24
and (2) Kosloski “did not provide a formal resignation.”25
B. PROCEDURAL HISTORY
In an effort to obtain his withheld paycheck, Kosloski filed a complaint with
the New Jersey Department of Labor claiming Plaintiffs failed to pay him wages in
violation of the New Jersey Wage Payment Law (“NJWPL”).26 A virtual hearing
was held on January 22, 2024, and the New Jersey Department of Labor determined
it had no jurisdiction over Kosloski’s wage claims.27
Subsequently, SecureNet brought this action against Kosloski for: (1) breach
of the Employment Agreement;28 (2) breach of the Employee Repayment
23 Kosloski Dep. 85:4-15. 24 Kosloski Dep. 85:16-22. 25 Kosloski Dep. 86:1-2. 26 Pls.’ Ans. Br. in Opp’n to Def.’s Mot. for Partial Summ. J. at 5 (D.I. 29). 27 Pls.’ Ans. Br. in Opp’n to Def.’s Mot. for Partial Summ. J., Ex E. 28 Compl. ¶¶ 20-29 (“Count I”). 8 Agreement;29 (3) promissory estoppel;30 and (4) unjust enrichment.31 Kosloski
counterclaimed for: (1) failure to pay earned commissions in violation of the
NJWPL;32 (2) withholding wages in violation of the NJWPL;33 and (3) breach of the
Employment Agreement and Employee Commission Agreement.34
SecureNet moves for partial summary judgment in their favor under Superior
Court Rule 56 as to Counts I and II of their Complaint.35 Kosloski moves for partial
summary judgment in his favor regarding SecureNet’s Counts II, III, and IV and
Kosloski’s Counterclaim Count II.36
29 Compl. ¶¶ 30-41 (“Count II”). 30 Compl. ¶¶ 42-49 (“Count III”). Promissory estoppel is pled as an alternative to Count II, should the Court find that the parties did not create a valid and binding contract in the form of the Employee Repayment Agreement. 31 Compl. ¶¶ 50-54 (“Count IV”). Unjust enrichment is also pled as an alternative count, should the Court find that the parties did not create a valid and binding contract in the form of the Employee Repayment Agreement. 32 Def.’s Ans. and Countercl., Countercl. Against All Pls. ¶¶ 8-10 (“Counterclaim Count I”). 33 Def.’s Ans. and Countercl., Countercl. Against All Pls. ¶¶ 11-13 (“Counterclaim Count II”). 34 Def.’s Ans. and Countercl., Countercl. Against All Pls. ¶¶ 14-16 (“Counterclaim Count III”). 35 Pls.’ Partial Mot. for Summ. J. 36 Op. Br. in Support of Def.’s Mot. for Partial Summ. J. (D.I. 26). Neither party has moved for the Court to grant summary judgment on Kosloski’s Counterclaim Counts I and III. This Opinion only addresses SecureNet’s Counts I-IV and Kosloski’s Counterclaim Count II. 9 III. STANDARD OF REVIEW
Summary judgment is appropriate “when the record shows that there is no
genuine issue of material fact, and the moving party is entitled to judgment as a
matter of law.”37 The moving party bears the burden of demonstrating the
undisputed facts entitle it to judgment as a matter of law.38 When the moving party
sustains the initial burden of showing the nonexistence of any material issues of fact,
the burden shifts to the non-moving party to substantiate its adverse claim by
showing that there are material issues of fact in dispute.39
Where there is a material fact in dispute, or if it seems desirable to inquire
more thoroughly into the facts to clarify the application of the law, summary
judgment is inappropriate.40 Similarly, where issues of fact are based on the
credibility of a witness, the Court will not grant summary judgment.41
37 Super. Ct. Civ. R. 56(c). 38 Moore v. Sizemore, 405 A.2d 679, 680 (Del. 1979). 39 Brzoska v. Olson, 668 A.2d 1355, 1364 (Del. 1995) (citing Moore, 405 A.2d 679, 680). 40 Ocwen Loan Servicing, LLC v. HSBC Bank USA, 2014 WL 3058230, at *2 (Del. Super. June 30, 2014) (citing Tew v. Sun Oil Co., 407 A.2d 240, 242 (Del. Super. 1979)). Id. (citing Block Fin. Corp. v. Inisoft Corp., 2006 WL 3240010, at *3 (Del. Super. 41
Oct. 30, 2006)). 10 “[C]ross-motions for summary judgment are not the procedural equivalent of
a stipulation for a decision.”42 The mere presence of cross-motions for summary
judgment “does not act per se as a concession” that there are no material facts in
dispute.43 Rule 56 permits the Court to deem cross motions for summary judgment
“to be the equivalent of a stipulation for decision on the merits based on the record
submitted with the motions” only if the parties “have not presented argument” on
the existence of a material factual issue.44 In this case, the parties have presented
such argument. Accordingly, the Court will evaluate each motion independently to
determine whether material factual issues exist.45
IV. ANALYSIS
A. THERE IS NO DISPUTE OF MATERIAL FACT, AND PLAINTIFFS ARE ENTITLED TO SUMMARY JUDGMENT IN THEIR FAVOR AS TO BREACH OF THE EMPLOYMENT AGREEMENT.
SecureNet moves for summary judgment on Plaintiffs’ Count I for breach of
the Employment Agreement. Plaintiffs posit that they are entitled to judgment in
42 Torrent Pharma, Inc. v. Priority Healthcare Distribution, Inc., 2022 WL 3272421, at *5 (Del. Super. Aug. 11, 2022) (quoting Empire of Am. Relocation Servs., Inc. v. Com. Credit Co., 551 A.2d 433, 435 (Del. 1988)). 43 Id. (citing United Vanguard Fund, Inc. v. TakeCare, Inc., 693 A.2d 1076, 1079 (Del. 1997)). 44 Id. (citing Del. Super. Ct. Civ. R. 56(h)). 45 Id. (citing Cont’l Airlines Corp. v. Am. Gen. Corp., 575 A.2d 1160, 1164 n.5 (Del. 1990)). 11 their favor as a matter of law because there is no genuine issue of material fact.46 In
support of their position, SecureNet alleges it is undisputed that Kosloski is bound
by the Employment Agreement and violated that agreement by voluntarily
terminating his employment via the Resignation Email.47
Kosloski admits that he signed and entered the Employment Agreement;48 he,
however, states that he did not resign.49 Instead, he argues that his resignation
constitutes a constructive discharge by SecureNet because SecureNet failed to pay
him at least $19,652.13 of his commission.50 Kosloski also argues that Plaintiffs
materially breached the Employee Commission Agreement by failing to pay him that
amount, which, he asserts, relieves him of his obligations under the Employment
Agreement.51
46 Pls.’ Partial Mot. for Summ. J. ¶ 1. 47 Pls.’ Partial Mot. for Summ. J. ¶ 9. 48 Def.’s Ans. and Countercl. ¶ 6. 49 Def.’s Resp. in Opp’n to Pls.’ Mot. for Partial Summ. J. at 5-6 (D.I. 30). 50 Def.’s Resp. in Opp’n to Pls.’ Mot. for Partial Summ. J. at 5-6. Kosloski initially calculated his damages to be $10,038.49 of unpaid commission. See Def.’s Ans. and Countercl. ¶ 19. Following Plaintiffs’ production of discovery, Kosloski calculated his damages to be $19,652.13 of unpaid commissions allegedly earned from January 2021 to February 2022. See Def.’s Resp. in Opp’n to Pls.’ Mot. for Partial Summ. J. at 5. At oral argument, Kosloski clarified that he had calculated at that point that at least $20,000 of commissions were not paid to him, with the potential for additional damages to be proved at trial. 51 Def.’s Resp. in Opp’n to Pls.’ Mot. for Partial Summ. J. at 6. 12 Finally, Kosloski argues that, even if the Court finds he did resign and
construes the Employment Agreement and Employee Commission Agreement
separately, he is still not bound under the Employment Agreement because: (1)
Plaintiffs breached the implied covenant of good faith and fair dealing;52 and (2) the
Employment Agreement contains an unlawful liquidated damages clause.53
1. THERE IS NO MERIT TO KOSLOSKI’S ARGUMENT THAT HE WAS CONSTRUCTIVELY DISCHARGED.
The record demonstrates that Kosloski voluntarily resigned from his
position.54 An employee who resigns rather than being terminated may have a claim
for constructive discharge if the employer’s conduct forced them to resign.55
52 Def.’s Resp. in Opp’n to Pls.’ Mot. for Partial Summ. J. at 5, n.1. 53 Def.’s Ans. and Countercl., Affirmative Defenses ¶ 5. 54 Pls.’ Partial Mot. for Summ. J., Ex. 1. Without any support, Kosloski contends that there is a factual dispute as to whether he resigned or was terminated. See Op. Br. in Support of Def.’s Mot. for Partial Summ. J. at 5. Separately, at his deposition, Kosloski testified that he was terminated by SecureNet one week after sending the Resignation Email. Kosloski Dep. 84:15-23. Kosloski, however, did not raise this argument on summary judgment. Even if considered properly raised, Kosloski provided no evidence to support this allegation. Hence, there is no merit to Kosloski’s contention that he was terminated by SecureNet on a later date. There is no factual dispute that Kosloski resigned. The Resignation Email plainly states an intent to resign. No reasonable jury would read “I intend to resign” and find that Kosloski’s Resignation Email is anything other than notice of Kosloski’s resignation, especially considering Kosloski’s offer to make himself available for any transitional meetings. Likewise, no reasonable jury would find that Kosloski’s resignation was contingent upon a subsequent formal resignation. 55 Rizzitiello v. McDonald's Corp., 868 A.2d 825, 832 (Del. 2005) (citing Pennsylvania State Police v. Suders, 542 U.S. 129 (2004) (“Under the constructive discharge doctrine, an employee’s reasonable decision to resign because of 13 Constructive discharge claims assume that the employee was not terminated.56
These claims are predicated on the concept that an employer has made the work
environment so intolerable as to leave the employee with no choice but to resign.57
To establish a constructive discharge, an employee must show “working conditions
so intolerable that a reasonable person would have felt compelled to resign.”58
Relying on a separate agreement, Kosloski contends that SecureNet’s failure
to pay commission owed to him under the Employee Commission Agreement
establishes an inference that his working conditions were intolerable such that he
had no choice but to resign.59 In support of his position, Kosloski cites to the Court’s
holding in Conger v. Legg Mason, Inc.60 Conger is distinguishable. There, the Court
held that failure to pay the employee four quarters’ worth of distributions in the
minimum amount of $100,000—totaling at least $400,000—amounted to
unendurable working conditions is assimilated to a formal discharge for remedial purposes.”). 56 Lipson v. Anesthesia Services, P.A., 790 A.2d 1261, 1280 (Del. Super. 2001). 57 Id. 58 Rizzitiello v. McDonald’s Corp., 868 A.2d at 832 (citing Pennsylvania State Police v. Suders, 542 U.S. 129 (2004)) (emphasis added). 59 Def.’s Resp. in Opp’n to Pls.’ Mot. for Partial Summ. J. at 6. 60 Def.’s Resp. in Opp’n to Pls.’ Mot. for Partial Summ. J. at 6.; 2011 WL 5301787 (Del. Super. July 21, 2011). 14 constructive discharge.61 Importantly, in Conger, the employee’s distributions
represented two-thirds of his annual compensation.62
At the time Kosloski resigned, Kosloski alleged that Plaintiffs had failed to
pay him $10,038.49 of unpaid commission.63 Under the Employment Agreement,
Kosloski received $100,000 annual base salary in addition to his commission.64
Here, unlike in Conger, Kosloski’s unpaid commission represents less than ten
percent of Kosloski’s annual compensation. Also, unlike the employee in Conger,
Kosloski cannot show that the failure to pay less than $11,000 in earned commission
rose to the level of “working conditions so intolerable” required to establish a
constructive discharge. Accordingly, Kosloski’s situation does not rise to the level
required to establish constructive discharge.
61 Conger, 2011 WL 5301787, at *1. 62 Conger, 2011 WL 5301787, at *1 (noting that “Plaintiff’s guaranteed annual compensation package was $600,000, a $200,000 as a base salary with $400,000 in minimum quarterly payments.”). 63 See Def.’s Ans. and Countercl. ¶ 19. After SecureNet’s production of discovery, Kosloski calculated his damages to be significantly higher, alleging SecureNet withheld nearly $20,000 in unpaid commission. See Def.’s Resp. in Opp’n to Pls.’ Mot. for Partial Summ. J. at 5. However, at the time of his resignation, Kosloski only believed Plaintiffs had failed to pay him $10,038.49 of the commission due to him. Def.’s Ans. and Countercl. ¶ 19. 64 Employment Agreement ¶ 3 (“Compensation”). 15 Further, in the Resignation Email, Kosloski indicated that his decision to
resign was also based on the denial of possible future commission increases.65
Kosloski also testified that he hoped his Resignation Email would result in a
counteroffer of continued employment with SecureNet.66 Specifically, Kosloski
requested that SecureNet increase his commission percentages to be “in line” with
other sales professionals.67 The denial of possible future promotions or raises is
legally insufficient to support a claim of constructive discharge.68 Thus, for this
additional basis, the doctrine of constructive discharge does not apply to Kosloski’s
resignation.
Kosloski fails to establish that a reasonable person in his situation would have
been compelled to resign; nor does Kosloski show that he himself was left with “no
choice but to resign,” especially considering his deposition testimony that he had no
intent to do so at the time he emailed Plaintiffs.69 Accordingly, there is no merit to
Kosloski’s affirmative defense that he was not bound under the Employment
Agreement because he was constructively discharged.
65 Pls.’ Partial Mot. for Summ. J., Ex. 1. 66 Kosloski Dep. 83:7-12. 67 Kosloski Dep. 56:18-57:3. 68 Rizzitiello v. McDonald’s Corp., 868 A.2d at 832. 69 Kosloski Dep. 83:7-12. 16 2. THERE IS NO MERIT TO KOSLOSKI’S ARGUMENT THAT HE WAS NOT BOUND UNDER THE EMPLOYMENT AGREEMENT BECAUSE OF PLAINTIFFS’ ALLEGED BREACH OF THE EMPLOYMENT COMMISSION AGREEMENT.
Kosloski next contends that Plaintiffs breached the Employment Commission
Agreement by failing to pay him his outstanding commissions. Kosloski argues that
as the Employee Commission Agreement and the Employment Agreement were
signed the same day, the agreements were intended to operate together.70 Therefore,
he contends, a material breach of the Employee Commission Agreement would
relieve him of his obligations under the Employment Agreement.
Kosloski is correct that when the parties have executed separate documents
on the same day covering the same time period and intend these documents to
“operate as two halves of the same business transaction,” then the Court must treat
them as one contract.71 Plaintiffs, however, dispute that there was intent for the two
documents to act as one contract.72 Plaintiffs specifically cite to the fact that the two
contracts cover different subject matters and do not reference one another as further
70 Def.’s Resp. in Opp’n to Pls.’ Mot. for Partial Summ. J. at 4-5. 71 E.I. duPont de Nemours and Co., Inc. v. Shell Oil Co., 498 A.2d 1108, 1115 (Del. 1985). 72 Pls.’ Reply in Further Support of their Partial Mot. for Summ. J. ¶ 2 (D.I. 32). 17 evidence that they did not intend for the Employment Agreement and the Employee
Commission Agreement to act as “two halves of the same business transaction.”73
As part of governing Kosloski’s employment, the Employment Agreement
generally addresses compensation and explains that it is within SecureNet’s
discretion to award bonuses, commission, and other forms of compensation.74 The
Employee Commission Agreement, on the other hand, sets forth Kosloski’s specific
commission structure through the discretionary grant provided in the Employment
Agreement.75 The Employment Agreement’s compensation-related discretion and
the Employee Commission Agreement’s discretionary issuance of commission
evidences the relatedness between the two agreements, but does not suggest the
agreements are two parts of a whole. Accordingly, the parties did not intend for the
agreements to operate together, especially considering SecureNet’s authority under
73 Id. ¶ 3. (“There is no indication that the parties intended the agreements to be a single large agreement, or that a breach of one would constitute a breach of the other. To the contrary, the fact that Kosloski’s commission compensation was set forth in a separate agreement evinces an intent to make this agreement separate from the Employment Agreement.”) 74 Employment Agreement ¶ 3(c). 75 See Employee Commission Agreement at 1. 18 the Employment Agreement to modify the Employee Commission Agreement at
their discretion.76
Any alleged breach of the Employee Commission Agreement does not relieve
Kosloski of obligations under the Employment Agreement. Therefore, there is no
merit to Kosloski’s argument that he was not bound under the Employment
Agreement because of SecureNet’s alleged breach of the Employee Commission
Agreement.
3. THERE IS NO MERIT TO KOSLOSKI’S ARGUMENT THAT HE WAS NOT BOUND UNDER THE EMPLOYMENT AGREEMENT BECAUSE OF AN ALLEGED BREACH OF THE IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING.
Additionally, Kosloski argues that even if the Court construes the
Employment Agreement and Employee Commission Agreement separately,
Plaintiffs still breached the implied covenant of good faith and fair dealing.77
Without any support, Kosloski specifically contends that Plaintiffs’ attempt to
recover liquidated damages is in bad faith, and, therefore, a prior material breach of
the implied covenant within the Employment Agreement.78
76 The Employee Commission Agreement also expressly provides that it is at Plaintiffs’ discretion if final commission will be paid after termination of employment. Employee Commission Agreement at 2. 77 Def.’s Resp. in Opp’n to Pls.’ Mot. for Partial Summ. J. at 5, n.1. 78 Id. 19 The implied covenant’s purpose is to supply terms which the parties
overlooked while negotiating an agreement.79 Although an implied covenant of
good faith and fair dealing exists in every contract, our courts have been reluctant to
impose obligations under that implied covenant.80 A court may supply terms under
the implied covenant only when “it is clear from the contract that the parties would
have agreed to that term had they thought to negotiate the matter.”81
The Employment Agreement contains specific provisions to address
Kosloski’s early departure from employment.82 Specifically, the Employment
Agreement provides: “Employee may terminate this Agreement for any reason upon
45 days written notice to Company.”83 Moreover, the Employment Agreement
expressly outlines that the “Employer also may award to Employee such bonuses,
commissions, and other forms of compensation as Employer shall deem
appropriate.”84 Thus, as the express provisions of the Employment Agreement cover
the conduct at issue, the implied covenant does not apply here.85 This Court will not
79 Kent County Equipment, Inc. v. Jones Motor Group, Inc., 2009 WL 737782, at *5 (Del. Super. Mar. 20, 2009). 80 Id. 81 Id. 82 Employment Agreement ¶ 2 (“Term”). 83 Employment Agreement ¶ 2(c) (emphasis added). 84 Employment Agreement ¶ 3 (“Compensation”). 85 Id. 20 conclude under the guise of the implied covenant that Kosloski’s express contractual
rights have somehow been abridged. Therefore, there is no merit to Kosloski’s
contention that he was not bound under the Employment Agreement because of an
alleged breach of the implied covenant.
4. THERE IS NO MERIT TO KOSLOSKI’S ARGUMENT THAT THE LIQUIDATED DAMAGES CLAUSE WITHIN THE EMPLOYMENT AGREEMENT IS A PENALTY CLAUSE. Finally, Kosloski contends that the Employment Agreement contains an
unlawful liquidated damages clause.86 Liquidated damages provisions embody “the
parties’ best guess of the amount of injury that would be sustained in a contractual
breach” and serve to make “certain and definite damages which would otherwise be
uncertain and not susceptible of proof.”87 By contrast, a “penalty” is a sum inserted
into a contract that serves as a punishment for default, rather than a measure of
compensation for its breach.88 “Delaware’s fundamental public policy of contractual
enforcement is not absolute and will kneel to competing public policies of overriding
86 Def.’s Ans. and Countercl., Affirmative Defenses ¶ 5. Kosloski raised this argument as an affirmative defense in his Answer. 87 Unbound Partners Limited Partnership v. Invoy Holdings Inc., 251 A.3d 1016, 1032 (Del. Super. 2021). 88 Delaware Bay Surgical Services, P.C. v. Swier, 900 A.2d 646, 650 (Del. 2006). 21 concern.”89 For example, “[t]he inclusion of penalties disguised as liquidated
damages provisions presents one such constraint on the freedom of contract.”90
The record here shows that $5,000 was a reasonable forecast, rationally
related and not unconscionable, of the amount of injury that would be sustained by
a contractual breach by Kosloski.91 Kosloski submits no evidence otherwise. Thus,
the provision in question is a true liquidated damages provision which must be
enforced according to its own terms. There is no merit to Kosloski’s contention that
the Employment Agreement contains an unlawful liquidated damages clause.
* * *
Plaintiffs are entitled to judgment in their favor as a matter of law because
there is no genuine issue of material fact as to Count I. Kosloski is bound by the
Employment Agreement and violated that agreement by voluntarily terminating his
employment without providing 45 days written notice. Kosloski’s arguments of
constructive discharge, breach of the Employee Commission Agreement, and breach
of the implied covenant do not apply to the facts at hand and do not relieve him of
89 Unbound Partners Limited Partnership, 251 A.3d at 1032. 90 Id. 91 See Kold, LLC v. Croman, 2014 WL 7008431, at *5-6 (Del. Super. Nov. 25, 2014) (holding a liquidated damages provision requiring an employee to pay $35,000 to the employer in the event of a breach was a reasonable estimate of the employer’s potential losses and did not constitute a penalty). 22 his obligations under the Employment Agreement. Further, the liquidated damages
provision within the Employment Agreement is not an unlawful penalty.
Accordingly, the Court GRANTS Plaintiffs’ Partial Motion for Summary
Judgment as to Count I.
B. THERE IS NO DISPUTE OF MATERIAL FACT, AND PLAINTIFFS ARE ENTITLED TO SUMMARY JUDGMENT IN THEIR FAVOR AS TO BREACH OF THE EMPLOYEE REPAYMENT AGREEMENT.
Both parties move for summary judgment in their favor on Plaintiffs’ Count
II for breach of the Employee Repayment Agreement. Plaintiffs assert that there is
no genuine dispute of material fact because it is “undisputed” that (1) the Employee
Repayment Agreement is enforceable and (2) Kosloski voluntarily terminated his
employment within five years of his start date.92 As discussed previously, Kosloski
contends factual disputes exist regarding whether he resigned or was terminated.93
Separately, Kosloski argues there is no genuine issue of material fact because the
92 Pls.’ Partial Mot. for Summ. J. ¶¶ 9-10. 93 See Op. Br. in Support of Def.’s Mot. for Partial Summ. J. at 5. As previously determined, no factual dispute exists. See discussion supra Section IV.A.1, n.55. Under the Employee Repayment Agreement, Kosloski’s repayment obligation was triggered when he gave notice of his intention to voluntarily terminate his employment. Employee Repayment Agreement ¶ 2(a). In the Resignation Email, Kosloski expressly stated that “Regretfully, I intend to resign from Secure[N]et at the end of this week.” Pls.’ Partial Mot. for Summ. J., Ex. 1 at 2 (emphasis added). Kosloski’s Resignation Email triggered his repayment obligation under Paragraph 2(a). 23 agreement is void: (1) under New Jersey law;94 (2) due to a breach of the implied
covenant of good faith and fair dealing by the Plaintiffs;95 (3) under the doctrine of
frustration of purpose;96 and (4) because Plaintiffs cannot prove their damages under
the Employee Repayment Agreement to a “reasonable certainty.”97
1. THERE IS NO MERIT TO KOSLOSKI’S ARGUMENT THAT HE WAS NOT BOUND UNDER THE EMPLOYEE REPAYMENT AGREEMENT BECAUSE THE EMPLOYEE REPAYMENT AGREEMENT WAS VOID AND UNENFORCEABLE AS A VIOLATION OF THE NJWPL.
Kosloski first argues that he was not bound by the Employee Repayment
Agreement because the agreement is void and unenforceable as a violation of the
NJWPL.98 The NJWPL, N.J.S.A. 34:11-4.1 to 4.14, and specifically, N.J.S.A. 34:11-
4.7, prohibits an employer from, among other actions, entering into an agreement
with its employee withholding or reducing wages already earned.99
Section 34:11-4.4 states: “No employer may withhold or divert any portion of
an employee’s wages unless: a) the employer is required or empowered to do so by
New Jersey or United States law ....” The NJWPL defines wages as: “[D]irect
monetary compensation for labor or services rendered by an employee, where the
94 Def.’s Resp. in Opp’n to Pls.’ Mot. for Partial Summ. J. at 6. 95 Id. 96 Id. 97 Op. Br. in Support of Def.’s Mot. for Partial Summ. J at 12. 98 Id. at 10-11. 99 Minoia v. Kushner, 839 A.2d 90, 92 (N.J. Super. 2004). 24 amount is determined on a time, task, piece, or commission basis excluding any form
of supplementary incentives and bonuses which are calculated independently of
regular wages and paid in addition thereto.” The NJWPL further declares
agreements entered in violation of the NJWPL to be null and void as against public
policy.100
In response, Plaintiffs assert that the choice of law provision within the
Employee Repayment Agreement is effective and that the contract should be
interpreted under Delaware law. Under Delaware’s Wage Payment and Collection
Act (“WPCA”), an employer may withhold wages when there are reasonable
grounds for a dispute between the employer and employee arising out of the
employment contract; in other words, when an employee leaves owing an
employment-related debt to his employer, the employer may deduct the employee’s
debt from final wages.101
When faced with a choice-of-law issue, Delaware applies the Second
Restatement’s most significant relationship test to find which state’s substantive law
applies to the case.102 The Court looks at three factors for the choice-of-law analysis:
(i) determining if the parties made an effective choice of law through their contract;
100 Kennedy v. Weichert Co., 2021 WL 2774844, at *2 (N.J. Super. July 2, 2021). 101 19 Del. C. § 1103(b). 102 Kilian v. International Society of Interdisciplinary Engineers LLC, 2023 WL 234566, at *9 (Del. Super. Jan. 18, 2023). 25 (ii) if not, determining if there is an actual conflict between the laws of the different
states each party urges should apply; (iii) if so, analyzing which state has the most
significant relationship.103 If the Court, however, determines the parties made an
effective choice of law, the Court’s analysis does not end there. Under the
Restatement (Second) of Conflict of Laws § 187 (the “Restatement”),
If the parties to a contract have selected the law of a particular jurisdiction to govern their agreement, then “[t]he law of the state chosen by the parties to govern their contractual rights and duties will be applied,” unless either:
(a) the chosen state has no substantial relationship to the parties or the transaction and there is no other reasonable basis for the parties’ choice, or
(b) application of the law of the chosen state would be contrary to a fundamental policy of a state which has a materially greater interest than the chosen state in the determination of the particular issue and which, under the rule of § 188, would be the state of the applicable law in the absence of an effective choice of law by the parties.104 Thus, under the Restatement, the parties may have agreed that the contract is
governed by Delaware law, but there could be another state that has a “materially
103 Id. 104 Focus Financial Partners, LLC v. Holsopple, 241 A.3d 784, 803-04 (Del. Ch. 2020) (citing Restatement (Second) of Conflict of Laws §187 (1971)). 26 greater interest than the chosen state in the determination of [a] particular issue …”
within that contract.105
Here, it is undisputed that the parties made an effective choice of law through
the Employee Repayment Agreement such that the contract as a whole will be
governed under Delaware law.106 As a result, this contract must be interpreted under
Delaware law unless Kosloski can demonstrate all of the following the State of New
Jersey: (1) has a materially greater interest in this issue than Delaware; (2) has a
fundamental policy that would be violated by the application of Delaware law; and
(3) would be the state of applicable law in the absence of a choice of law provision.107
Kosloski argues New Jersey has a materially greater interest than Delaware in the
determination of the particular issue of whether the Plaintiffs are permitted to
withhold Kosloski’s final paycheck in the event of a Repayment Event.
Even if Kosloski could establish that New Jersey has a materially greater
interest, he cannot satisfy Section 187(2)(b)’s third prong. To make the three-part
showing required under Section 187(2)(b), Kosloski must demonstrate that New
105 Id. at 806 (“Each issue is to receive separate consideration if it is one which would be resolved differently under the local law rule of two or more of the potentially interested states.”). 106 See Employee Repayment Agreement ¶ 7; see also Def.’s Reply Br. at 2 (D.I. 33). 107 Restatement Section 187(2)(b). Kosloski does not challenge choice of law under Section 187(2)(a), and he could not do so successfully. Plaintiffs are incorporated in Delaware, giving the State a “substantial relationship” to Plaintiffs. See Restatement Section 187 cmt. f. 27 Jersey would be the default state in the absence of an effective choice of law.
Kosloski fails to do so.
Section 187(2)(b) directs courts to consider Section 188’s factors in
determining which state’s laws would apply absent an effective choice of law
provision. Section 188’s factors include: “(a) the place of contracting, (b) the place
of negotiation of the contract, (c) the place of performance, (d) the location of the
subject matter of the contract, and (e) the domicile, residence, nationality, place of
incorporation and place of business of the parties.”108 Importantly, a court should
consider the contacts’ relative importance to the issue at hand, and should not
perform a simple quantitative analysis by adding up which forum has more
contacts.109
The Employee Repayment Agreement concerned threatened litigation
“against the Company and Employee that implicate the Company’s employment of
Employee.”110 Thus, the subject matter of the agreement—SecureNet’s conditional
108 Restatement (Second) Conflicts of Laws § 188(2). 109 GTE Mobilnet Inc. v. Nehalem Cellular, Inc., 1994 WL 116194, at *3 (Del. Ch. Mar. 17, 1994) (citing Travelers Indem. Co. v. Lake, 594 A.2d 38, 48 (Del. Super. 1991)). 110 Employee Repayment Agreement, preamble. 28 payment of the joint defense fees—specifically addressed litigation brought by
Quake in California.111
Plaintiffs are Delaware businesses with their principal places of business
located in Delaware.112 Under the Employee Repayment Agreement, Kosloski
agreed to repay the Defense Costs to the Plaintiffs if he voluntarily resigned within
5 years after his start date of September 14, 2020.113 While Kosloski disputes how
much time he worked in Delaware, Kosloski worked at the physical office location
in Delaware at least once a week.114 Kosloski also worked remotely from his
residence in New Jersey.115 SecureNet’s promised performance involved the
payment of fees from a Delaware business to a California law firm.116
Under this backdrop, New Jersey would not be the state of applicable law in
the absence of a choice of law provision by the parties as: (1) the places of
See D.I. 29, Ex. B (Complaint in Quake Global, Inc. v. Mark Kosloski, et al., C.A. 111
No. 37-2020-00040730-CU-BC-CTL, filed in the Superior Court of the State of California for the County of San Diego, Central Division). 112 Pls.’ Ans. Br. in Opp’n to Def.’s Mot. for Partial Summ. J. at 7. Kosloski contends that SecureNetMD, LLC, registered itself to conduct business within New Jersey as a foreign limited liability company; however, Kosloski does not dispute that the State of Delaware is the domicile, place of incorporation, and principal place of business of SecureNetMD, LLC. See Op. Br. in Support of Def.’s Mot. for Partial Summ. J. at 4, 8. 113 See Employee Repayment Agreement ¶ 2. 114 Pls.’ Ans. Br. in Opp’n to Def.’s Mot. for Partial Summ. J. at 7. 115 Op. Br. in Support of Def.’s Motion for Partial Summ. J. at 4. 116 See Employee Repayment Agreement; see also D.I. 29, Ex. B. 29 performance for the parties were SecureNet’s principal place of business in
Delaware and Kosloski’s residence in New Jersey;117 (2) the location of the subject
matter was California;118 and (3) three of the four parties to the agreement—Troy
Ventures, LLC; SecureNetMD, LLC; and ThinkSecureNet, LLC—were companies
organized and domiciled under the laws of the State of Delaware.119 The place of
contracting and place of negotiation are unknown, so these factors are neutral.120 As
a result, the Employee Repayment Agreement must be interpreted under Delaware
law.121
2. THERE IS NO MERIT TO KOSLOSKI’S ARGUMENT THAT HE WAS NOT BOUND UNDER THE EMPLOYEE REPAYMENT AGREEMENT BECAUSE OF AN ALLEGED BREACH OF THE IMPLIED COVENANT OF GOOD FAITH AND FAIR DEALING.
Again, without any support, Kosloski contends that Plaintiffs breached the
implied covenant by failing to pay him his earned commissions.122 As explained
117 Pls.’ Ans. Br. in Opp’n to Def.’s Mot. for Partial Summ. J. at 7. 118 D.I. 29, Ex. B. 119 Employment Agreement, preamble. 120 Kosloski asserts he does not remember the place of contracting or negotiation for the Employee Repayment Agreement. Op. Br. in Support of Def.’s Mot. for Partial Summ. J. at 8. 121 Failure to satisfy the default-state element is enough to end the analysis under Section 182(b)(2). See, e.g., Wind Point, 2020 WL 5054791, at *19 (Del. Super. Aug. 17, 2020) (holding a party must demonstrate clearly default state, fundamental public policy, and materially greater interest elements to invoke the Section 187(2)(b) exception) (citation omitted). 122 Def.’s Resp. in Opp’n to Pls.’ Mot. for Partial Summ. J. at 6. 30 above, the implied covenant does not apply where the express provisions of a
contract cover the conduct at issue, so a party invoking the implied covenant must
plead a “gap” for which the covenant might supply a term.123 Kosloski, however,
has not pleaded a gap.124 Furthermore, the Employee Repayment Agreement
authorizes SecureNet to withhold Kosloski’s final paycheck as partial payment of
the Defense Costs.125 As a result, Kosloski’s implied covenant argument fails.
3. THERE IS NO MERIT TO KOSLOSKI’S ARGUMENT THAT HE WAS NOT BOUND UNDER THE EMPLOYEE REPAYMENT AGREEMENT UNDER THE DOCTRINE OF FRUSTRATION OF PURPOSE.
Kosloski further argues that Plaintiffs frustrated the Employee Repayment
Agreement by failing to instruct its California defense counsel to separately account
for SecureNet’s attorneys’ fees.”126 A contracting party’s obligations may be
discharged by the frustration of purpose doctrine when his “principal purpose is
substantially frustrated without his fault by the occurrence of any event the non-
occurrence of which was a basic assumption on which the contract was made.”127
123 Bandera Master Fund LP v. Boardwalk Pipeline Partners, LP, 2019 WL 4927053, at *22 (Del. Ch. Oct. 7, 2019). 124 See Def.’s Resp. in Opp’n to Pls.’ Mot. for Partial Summ. J. at 6. 125 Employee Repayment Agreement ¶ 4. 126 Def.’s Resp. in Opp’n to Pls.’ Mot. for Partial Summ. J. at 6. 127 Bardy Diagnostics, Inc. v. Hill-Rom, Inc., 2021 WL 2886188, at *40 (Del. Ch. July 9, 2021) (quoting Wal-Mart Stores, Inc. v. AIG Life Ins. Co., 901 A.2d 106, 113 (Del. 2006)). 31 The frustration of purpose doctrine is “very difficult to invoke”128 and “is generally
limited to cases where a virtually cataclysmic, wholly unforeseeable event renders
the contract valueless to one party.”129 In essence, the frustration must be so severe
that it cannot be fairly regarded as within the risks that the party assumed under the
contract.130
The primary purpose of the Employee Repayment Agreement was to allow
SecureNet to recover the Defense Costs related to the Quake litigation, if Kosloski
did not continue to work for SecureNet. Kosloski contends that because the
“Defense Costs” within the Agreement were defined as “all reasonable attorneys[’]
fees incurred in defending the Claims against [Kosloski],” the purpose of the
Agreement was frustrated when Plaintiffs failed to instruct their California Counsel
to separately account for SecureNetMD’s fees.131 Kosloski fails to demonstrate how
the principal purpose of the Employee Repayment Agreement—to allow SecureNet
128 Andor Pharmaceuticals, LLC v. Lannett Company, 2024 WL 1855112, at *14 (Del. Super. Apr. 29, 2024) (citing Promise Easy Ltd. v. Moon, 2023 WL 5152173, at *19 (Del. Ch. Aug. 10, 2023)). 129 Id. (citing McReynolds v. Trilantic Capital Partners IV L.P., 2010 WL 3721865, at *4 (Del. Ch. Sept. 23, 2010)). Bardy Diagnostics, 2021 WL 2886188, at *40 (quoting Restatement (Second) of 130
Conts § 265 cmt. a). 131 Def.’s Reply Br. at 5. 32 to recover funds spent defending Kosloski from litigation—would be frustrated
based on SecureNet’s failure to allocate the defense costs.
Thus, the doctrine of frustration of purpose does not apply to invalidate the
Employee Repayment Agreement for SecureNet’s failure to keep separate records
of the costs associated with defending the company and Kosloski.
4. KOSLOSKI’S ARGUMENT THAT SECURENET CANNOT ESTABLISH DAMAGES WITH THE REASONABLE CERTAINTY REQUIRED TO PREVAIL DOES NOT PRECLUDE SUMMARY JUDGMENT.
Kosloski further contends that SecureNet cannot establish damages with the
reasonable certainty required to prevail.132 Kosloski specifically argues that because
SecureNet failed to keep separate records of the costs associated with defending the
company and Kosloski, SecureNet cannot establish the amount of damages they are
owed with reasonable certainty.133 However, at this stage, SecureNet seeks
summary judgment only as to liability.134
Accordingly, there is no merit to Kosloski’s assertion that summary judgment
cannot be granted in SecureNet’s favor because SecureNet cannot establish damages
with the reasonable certainty required to prevail. Because SecureNet only seeks
132 Op. Br. in Support of Def.’s Mot. for Partial Summ. J. at 12. 133 Id. at 11-12. 134 Pls.’ Partial Mot. for Summ. J. ¶ 10. 33 summary judgment as to liability at this time, whether damages can be estimated
with reasonable certainty is not at issue and does not preclude summary judgment.135
* * * The Employee Repayment Agreement, including the particular issue of wage
payment, must be construed under Delaware law; the implied covenant and the
doctrine of frustration of purpose do not apply; and Plaintiffs need not prove their
damages with reasonable certainty at this stage. Therefore, the Employee
Repayment Agreement is not void, the Employee Repayment Agreement is a valid,
binding contract, and Kosloski’s Resignation Email triggered his repayment
obligation under Paragraph 2(a). Kosloski’s Motion for Partial Summary Judgment
is DENIED as to Plaintiffs’ Count II. Plaintiffs’ Partial Motion for Summary
Judgment is GRANTED as to Plaintiffs’ Count II.
C. THERE IS NO DISPUTE OF MATERIAL FACT, AND KOSLOSKI IS ENTITLED TO SUMMARY JUDGMENT IN HIS FAVOR AS TO PLAINTIFFS’ CLAIMS FOR PROMISSORY ESTOPPEL AND UNJUST ENRICHMENT.
Kosloski moves for summary judgment in his favor on Plaintiffs’ Count III
for promissory estoppel and Plaintiffs’ Count IV for unjust enrichment. Kosloski
primarily argues that Plaintiffs cannot replace a defective contract with a claim for
135 Del. Super. Civ. Rule 56(c) (“A summary judgment…may be rendered on the issue of liability alone although there is a genuine issue as to the amount of damages.”). 34 promissory estoppel or unjust enrichment.136 SecureNet responds that promissory
estoppel and unjust enrichment are properly pled as alternatives to Count II, should
the Court find that the parties did not create a valid and binding contract in the form
of the Employee Repayment Agreement.137
A claim for promissory estoppel requires a plaintiff to show the following: (1)
a promise was made; (2) it was the reasonable expectation of the promisor to induce
action or forbearance on the part of the promisee; (3) the promisee reasonably relied
on the promise and took action to his detriment; and (4) injustice can be avoided
only by enforcement of the promise.138 Promissory estoppel does not apply,
however, where a fully integrated, enforceable contract governs the promise at
issue.139
Unjust enrichment is “the unjust retention of a benefit to the loss of another,
or the retention of money or property of another against the fundamental principles
of justice or equity and good conscience.”140 The elements are: (1) an enrichment;
(2) an impoverishment; (3) a relation between the enrichment and impoverishment;
136 Op. Br. in Support of Def.’s Mot. for Partial Summ. J. at 13. 137 Pls.’ Ans. Br. in Opp’n to Def.’s Mot. for Partial Summ. J. at 15-16. 138 SIGA Technologies, Inc. v. PharmAthene, Inc., 67 A.3d 330, 347-48 (Del. 2013). 139 Id. at 348. JanCo FS 2, LLC v. ISS Facility Services, Inc., 2024 WL 4002825, at *20 (Del. 140
Super. Aug. 30, 2024). 35 and (4) the absence of justification.141 Like promissory estoppel, this cause of action
is not available if a contract governs the relationship between the parties that gives
rise to the claim.142
Here, Plaintiffs only plead promissory estoppel and unjust enrichment in the
alternative to their claim for breach of the Employee Repayment Agreement,
because the parties dispute the contract’s ongoing enforceability.143 At oral
argument, both parties acknowledged that the claims pled in the alternative are ripe
for summary judgment should the Court find that the contract at issue is valid and
enforceable.144
For the reasons explained above, the Employee Repayment Agreement is a
valid and enforceable contract; accordingly, Kosloski’s Motion for Partial Summary
Judgment is GRANTED as to Plaintiffs’ Counts III and IV.
D. KOSLOSKI IS NOT ENTITLED TO SUMMARY JUDGMENT IN HIS FAVOR AS TO HIS COUNTERCLAIM COUNT II.
Kosloski moves for summary judgment in his favor on his Counterclaim
Count II for SecureNet’s failure to provide his last paycheck in violation of the
141 Id. 142 Id. 143 Pls.’ Ans. Br. in Opp’n to Def.’s Mot. for Partial Summ. J. at 15-16. 144 See Pls.’ Ans. Br. in Opp’n to Def.’s Mot. for Partial Summ. J. at 16. (acknowledging that Plaintiffs’ claims pled in the alternative “should stand so long as Kosloski maintains that the [Employee Repayment Agreement] is void and the Court has not issued a final ruling on that issue”) (emphasis added). 36 NJWPL.145 An employer’s unilateral decision not to pay earned compensation
constitutes a material breach of an employment agreement.146
Plaintiffs withheld Kosloski’s final paycheck under a provision agreed to by
both parties in the Employee Repayment Agreement,147 which is governed under
Delaware law.148 Thus, it cannot be said that the Plaintiffs’ act of withholding
Kosloski’s final paycheck was a “unilateral” decision or a violation of the
NJWPL.149
There is no genuine dispute of material fact as to Kosloski’s claim that
SecureNet violated the NJWPL by withholding his final paycheck. The Court can
determine at this stage that: (1) New Jersey law does not apply to the particular issue
145 Def.’s. Mot. for Partial Summ. J. at 14. 146 Dickinson Med. Group, P.A. v. Foote, 1989 WL 40965, at *7 (Del. Super. Mar. 23, 1989); see also Shutzman v. Gill, 154 A.2d 226, 230 (Del. Ch. 1959) (“If the plaintiff was guilty of any material breach of his employment contract, he may not enforce its provisions against the defendant.”). 147 Employee Repayment Agreement ¶ 4 (“Deduction from Final Paycheck; Offset of Other Amounts”). 148 See discussion supra Section IV.B.1. 149 Kosloski’s contentions regarding Plaintiffs’ withholding of his last paycheck must be considered separately from his allegations that Plaintiffs withheld his earned commission throughout his employment. The ability to withhold Kosloski’s final paycheck was expressly granted to Plaintiffs under the Employee Repayment Agreement. Kosloski’s Counterclaim Count II exclusively concerns the fact that “Plaintiffs withheld Kosloski’s final paycheck in violation of [the NJWPL].” This opinion does not address the allegations in Kosloski’s Count I. 37 of wage payment within the Employee Repayment Agreement;150 and (2) SecureNet
was permitted to withhold Kosloski’s final paycheck under the terms of the
Employee Repayment Agreement. Accordingly, the Court DENIES Kosloski’s
Motion for Partial Summary Judgment to Kosloski’s Counterclaim Count II.
V. CONCLUSION
The Court GRANTS Plaintiffs’ Partial Motion for Summary Judgment as to
Plaintiffs’ Counts I and II and GRANTS Kosloski’s Motion for Partial Summary
Judgment as to Plaintiffs’ Counts III and IV (for promissory estoppel and unjust
enrichment). The Court DENIES Kosloski’s Motion for Partial Summary Judgment
as to Plaintiffs’ Count II and Kosloski’s Counterclaim Count II.
IT IS SO ORDERED.
/s/ Patricia A. Winston Patricia A. Winston, Judge
150 See discussion supra Section IV.B.1. 38