IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
UNICO COMMODITIES, LLC, ) ) Plaintiff, ) ) v. ) C.A. No.: N22C-08-436 SPL ) LOFTY LINKS, LLC, ) ) Defendant. )
Submitted: December 6, 2024 Decided: February 25, 2025
DECISION AND ORDER AFTER TRIAL
R. Karl Hill, Esq., SEITZ, VAN OGTROP & GREEN, P.A., Kevin J. Lennon, Esq., LENNON, MURPHY & PHILLIPS, LLC, Attorneys for Plaintiff Unico Commodities, LLC.
Neil R. Lapinski, Esq., and Madeline R. Silverman, Esq., GORDON, FOURNARIS & MAMMARELLA, P.A., Attorneys for Defendant Lofty Links, LLC.
LUGG, J. INTRODUCTION
In the fall of 2021, Lofty Links, LLC (“Lofty”) contracted to purchase
commodities from Refineria di Korsou (“RDK”). Alone, Lofty lacked the resources
and funding to fulfill its obligations under the contract, so it obtained a partner to do
what Lofty could not. That partner disappeared, and Lofty maneuvered to fill the
void. Lofty connected with Unico Commodities, LLC (“Unico”) and recast its
contractual dilemma as a partnership opportunity. Lofty sought to have Unico
finance and transport the commodities it – Lofty – contractually agreed to purchase
from RDK. Lofty also sought to reap a return from this transaction and to forge a
more lucrative partnership going forward. Alas, that did not occur.
Moving commodities – here, over 100,000 barrels of fuel – is not an easy task.
Among the sundry responsibilities, ships must be chartered, insurance arranged, and
approvals obtained. Compounding the complexity, the barrels subject to sale were
sanctioned; the seller, RDK, acquired the fuel commodities following legal
proceedings against Venezuelan entities who defaulted on obligations and simply
left them behind. United States companies, of course, are keenly focused on
complying with any such restrictions.
Against this backdrop, Lofty needed a partner to pay for and transport the
barrels it agreed to purchase from RDK. And they needed to find a partner quickly.
The initial window afforded Lofty less than a month – from November 2, 2021, to
1 November 20, 2021 – to meet the terms of the contract. Lofty convinced Unico to
assist in resolving Lofty’s immediate dilemma and then partnered with Unico on two
subsequent commodities contracts with RDK. To extend the soon-closing window
on the Lofty-RDK contract, Unico provided Lofty funds to be paid to RDK as a sign
of good faith dealing. In the end, no product was lifted by Lofty or Unico from RDK
under any of the contracts. Unico demanded the return of its money from Lofty, and
Lofty refused. This litigation commenced.
Unico filed suit for the return of the $380,000.00 it directed to Lofty. Lofty
counterclaimed seeking recovery of sums it contends it earned or which Unico, due
to its failure to lift the product, prevented it from earning. Following a two-day
bench trial and post-trial briefing, the Court finds the evidence supports Unico’s
claim for the return of its funding. The evidence does not support all but the last of
Lofty’s counterclaims; to the extent the evidence establishes expenditures for testing
related to the Unico-Lofty venture, those expenditures are addressed in Lofty’s
quantum meruit claim. In the end, the Court directs the entry of a judgment in
Unico’s favor in the amount of $338,397.10 plus prejudgment interest. The Court
rejects the parties’ claims for attorneys’ fees.
2 BACKGROUND
A. The Parties
Unico is a limited liability company organized under Texas law.1 Since 2019,
Unico has operated as a trading company, dealing in commodities including
gasoline, diesel, crude, and asphalt.2 Riccardo Valentini (“Valentini”) serves as the
owner and managing member of Unico and was the sole Unico witness offered at
trial.3
Lofty is a limited liability company organized under Delaware law.4
Established in 2018, Lofty operates as a consultant and project manager in the
petroleum industry.5 Lofty does not trade or transport petroleum products itself;
rather, it serves as an intermediary between brokers in the market. 6 Murali Iyengar
(“Iyengar”), the owner and only employee of Lofty, was the sole Lofty witness
presented at trial.7
1 D.I. 28 (“Trial Tr. Day 1”) at 21. This decision cites to trial exhibits (“JX #”), the trial transcript (“Trial Tr. Day __ at __”), and the Pretrial Stipulation and Order (“PTO”). 2 Trial Tr. Day 1 at 21. 3 Id. at 20. 4 Id. at 185. 5 Id. at 258. 6 Id. at 258-59. 7 Id. at 185-86.
3 B. Facts
1. Lofty Links’ Contract with RDK
On October 22, 2021, Lofty entered into a contract with RDK, a government-
owned refinery located in Willemstad, Curaçao, for the purchase of 50,000 barrels
of Jet Fuel and 50,000 barrels of MOGAS 95.8 As the buyer, Lofty agreed to pay
for and transport the products from Emmastad, Curaçao to a port of its choosing
between October 25, 2021, and November 20, 2021;9 but Lofty lacked the funds and
resources to fulfill its responsibilities under the contract.10 Instead, Lofty sought to
position itself as a liaison to secure a buyer to take delivery of the product from
RDK.11 From the contract’s inception, Lofty had neither the intention nor the
capacity to nominate or charter a vessel to lift the cargo.12
In early November 2021, Lofty’s scheduled buyers “were not able to collect
or bring up the finances to take the products,” leaving Lofty to find a replacement
buyer to preserve its contract with RDK.13 Lofty urgently needed to find a
8 Id. at 32, 201, 259, 261-62; JX 23. 9 Trial Tr. Day 1 at 259-61; JX 23 ¶¶ 5, 13, 14. 10 Trial Tr. Day 1 at 194. 11 Id. at 258-65. 12 Id. at 198, 201. 13 Id. at 194.
4 replacement company to pay for and take delivery of RDK’s products:14 Lofty could
not fulfill the contract on its own,15 the delivery period was rapidly approaching,16
and RDK’s U.S. Office of Foreign Assets Control (“OFAC”) license – permitting
the import of RDK’s Venezuelan product into the United States – was set to expire
on December 31, 2021.17
2. Lofty Links Connects with Unico
On November 3, 2021, Iyengar approached Unico “to see if they would be
interested in picking up these products under the contract that [Lofty] had signed
with RDK.”18 Iyengar telephoned and emailed Alvin Koolman, an employee of
Unico,19 to gauge Unico’s interest in Lofty’s contract with RDK.20 Koolman
followed that call with an email to Iyengar on November 11, 2021, summarizing the
key points of the discussion.21 Iyengar understood that, under the terms set forth in
the email, Unico, due to their access to ships and funding, would assume Lofty’s
responsibility as the buyer under their contract with RDK. Iyengar explained, “[w]e
14 Id. at 193-94. 15 Id. at 198, 201, 211. 16 Id. at 259-60. 17 Id. at 37-38, 89-90, 93-94, 265-66. 18 Id. at 195. 19 Id. 20 Id. at 266-67; JX 15. 21 JX 13 at 3-4.
5 agreed that Unico will essentially step – I would like to say ‘in the shoes’ of Lofty
to take the responsibility of the buyer under the first contract, as Unico had ships and
Unico had funding available.”22 Iyengar responded to Koolman’s email on
November 14, noting areas of agreement and clarifying other areas.23 Unico and
Lofty did not reduce the terms of this email exchange to a contract, and Iyengar
acknowledged, “Unico never signed any contract or written agreement for the
purchase to these products that Lofty was obligated to buy from RDK.”24
As the delivery deadline for the Lofty-RDK contract approached, Unico
worked to lift the products. On November 12, 2021, Unico submitted a required Q-
88 form to the refinery, providing detailed information about the vessel scheduled
to transport the products.25 The refinery rejected this submission.26 Lofty “needed
a new Q-88 urgently because [they] were already on the 14th of November” and the
delivery period was set to close on November 20, 2021.27
22 Trial Tr. Day 1 at 268-69. 23 JX 13 at 1-2. 24 Trial Tr. Day 1 at 207. Iyengar further explained that there was “[n]o formal written agency agreement, but the email, JX-13, was the basis in which everything was discussed and agreed.” Trial Tr. Day 1 at 226. 25 Id. at 271. 26 Id. at 274. 27 Id. at 273.
6 To provide some time to effectuate this transaction, the parties agreed that
Unico would make a “goodwill” payment to RDK to extend the delivery window
and to preserve the contract between Lofty and RDK.28 Because there was no direct
relationship between Unico and RDK, RDK would not accept payment directly from
Unico. For this reason, Unico transferred $380,000 to Lofty for distribution.29 Of
this amount, $250,000 was to be delivered by Lofty to RDK as a deposit for the
purchase of the product, and $130,000 was allocated to Lofty as an advance of its
anticipated fee.30 RDK extended Lofty’s delivery deadline.31
To comply with the United States’ OFAC requirements and avoid risking
sanctions, the RDK product needed to be lifted before the end of 2021. 32 On
December 31, 2021, RDK informed Unico and Lofty that its OFAC license was
officially extended through December 31, 2022.33 This afforded the parties
additional time to formulate and execute the various transactions.
28 Id. at 55-56, 221, 293, 300; D.I. 36 (“Trial Tr. Day 2”) at 115. 29 Trial Tr. Day 1 at 228. 30 Id. at 61, 302. 31 Id. at 299. 32 Id. at 37-38, 90. 33 Id. at 95; JX 12.
7 3. The Second Contract, the Third Contract, and the Agency Negotiations
After the goodwill payment to RDK, Lofty, Unico, and RDK continued to
develop their business relationship.34 For any other products available for purchase,
Unico agreed to contract with RDK “either directly or together jointly with Lofty.”35
In December 2021, Lofty and Unico, together jointly, entered into two additional
contracts with RDK.36 Under the second contract, Unico and Lofty agreed to
purchase 200,000 barrels of High Sulphur Fuel Oils (“HSFO”) and “slops” from
RDK.37 Under the third contract, Unico and Lofty agreed to purchase 420,000
barrels of crude vacuum gas oil and heavy naphtha from RDK.38
Unico and Lofty stood in equal footing relative to RDK in the second and third
contracts, and these agreements did not account for any compensation Lofty might
receive from Unico. Thus, Unico and Lofty worked to define the contours of their
business relationship.39 On January 11, 2022, Iyengar signed and sent an agency
agreement to Valentini, outlining how he expected Lofty would be compensated for
34 Trial Tr. Day 1 at 72-73. 35 Id. at 73. 36 Id. at 73-75, 77. Throughout trial, the parties referred to these as the “second” and “third” contracts and referred to the October Lofty-RDK only contract as the “first” contract. 37 Id. at 73; JX 24. 38 Trial Tr. Day 1 at 75; JX 25. 39 JX 9-11.
8 securing the second and third contracts.40 Valentini declined to countersign the
agreement because “there were things that won’t work for [Unico],” including the
jurisdiction clause and the responsibility for bearing fees.41
4. Lofty Unilaterally Terminated the Second and Third Contracts
With the OFAC license extended for a year, and with Unico and Lofty
working to fulfill their obligations, RDK extended the lifting period of all contracted
products.42 Unico continued to struggle to locate and nominate a suitable vessel to
lift the products, and Lofty, as buyer on all three contracts, did not independently
attempt to lift any products.43 Ultimately, none of the products were lifted.
On January 30, 2022, Lofty, in a letter to Valentini and Koolman, “notif[ied]
Unico that [Lofty is] withdrawing from the agreements, as Unico and Lofty Links
have not been able to reach any agreement between each other as to the terms of the
responsibilities and payment of financial fees as AGENT towards LOFTY, related
to these contracts.”44 Lofty concluded by “terminating this contract.”45 Lofty
40 Trial Tr. Day 2 at 28; JX 9, 10. 41 Trial Tr. Day 2 at 22, 24; JX 54. 42 Trial Tr. Day 1 at 299. 43 Id. at 98. 44 JX 20. 45 Id.
9 provided a copy of its purported termination to RDK by email.46 Lofty withdrew
from the agreements because, in its view, Unico was unable to lift the products,47
Valentini did not sign Lofty’s agency agreement,48 and Unico excluded it from
communications with RDK.49 Lofty also sought to preserve its reputation and avoid
legal action from the refinery due to Unico’s failure to lift the products.50
Following Lofty’s termination letter, Unico and RDK continued to negotiate
to preserve the agreements.51 These efforts proved unsuccessful; Unico did not lift
any of the product, and RDK ultimately sold the petroleum products to a third
party.52 Unico sued RDK, and RDK counterclaimed against Unico for lost profits.53
On June 5, 2023, the Court of First Instance of Curaçao rejected both parties’
claims.54
46 JX 14. 47 Trial Tr. Day 2 at 27, 29. 48 Id. at 28. 49 Id. at 28-30. 50 Id. at 30. 51 Trial Tr. Day 1 at 103; JX 22. 52 Trial Tr. Day 1 at 107. 53 Id. 54 Id.; JX 55.
10 Unico requested Lofty return the $380,000.55 In April, 2022, Unico directed
a formal demand letter to Lofty.56 Unico sought the return of this money “because
it was a down payment to a deal that didn’t occur.”57 Unico learned that RDK had
returned $227,000.00 of the $250,000.00 to Lofty,58 and nothing in Lofty and RDK’s
contract granted Lofty the right to keep Unico’s money.59 Lofty rejected Unico’s
demand.60 Lofty stated that it had already spent the money on various business
expenses,61 and that it considered Unico’s deposit to be non-refundable “earnest
money.”62 Further, Lofty asserted that it “incurred lost profits in the amount of $1.8
million in view of Unico’s failure to perform on the oil purchase contracts.”63
55 Trial Tr. Day 1 at 110. 56 Id. at 109-10; JX 19. 57 Trial Tr. Day 1 at 112. 58 Id. 59 Trial Tr. Day 2 at 63. 60 JX 47. 61 Trial Tr. Day 2 at 107. 62 Id. at 114. 63 JX 47.
11 GENERAL LEGAL PRINCIPLES
In a civil trial, “[e]ach party bears the burden of proving its claims by a
preponderance of the evidence.”64 Proof by a preponderance of the evidence means
“proof that something is more likely than not.”65 “This means that certain evidence,
when compared to the evidence opposed to it, has the more convincing force and
makes the Court believe that something is more likely true than not.” 66 If the
evidence presented by the parties “is inconsistent, and the opposing weight of the
evidence is evenly balanced, then ‘the party seeking to present a preponderance of
the evidence has failed to meet its burden.’”67 To determine which party has met its
burden, the Court “may consider the testimony of all witnesses regardless of who
called them, and all exhibits received into evidence regardless of who produced
them.”68
64 See, e.g., Navient Sols., LLC v. BPG Office Partners XIII Iron Hill LLC, 2023 WL 3120644, at *10 (Del. Super. Apr. 27, 2023) (internal citation omitted). 65 Feenix Payment Sys., LLC v. Blum, 2024 WL 2768386, at *10 (Del. Super. Ct. May 29, 2024). 66 Id. 67 Interim Healthcare, Inc. v. Spherion Corp., 884 A.2d 513, 545 (Del. Super. Ct. 2005) (quoting Eskridge v. Voshell, 593 A.2d 589 (TABLE), 1991 WL 78471, at *3 (Del. 1991)). 68 Feenix Payment Sys., LLC, 2024 WL 2768386, at *10.
12 In a bench trial, the Court sits as the fact finder.69 This role requires the Court
to “assess the credibility of the witnesses and then to weigh all of the evidence
presented.”70 The Court is “free to accept or reject any or all of the sworn testimony,
as long as it consider[s] all of the evidence presented,” just as a jury does.71 Where
the Court cannot reconcile conflicting evidence, it retains discretion to determine
which evidence deserves more weight.72
In reaching its verdict, the Court has examined all exhibits and considered the
testimony of all of the witnesses. The fact that some particular point or concept may
be mentioned should not be read as any indication that the Court did not consider all
evidence and legal principles applicable to this case and to the parties’ claims,
counterclaims, and defenses. It is difficult at times to completely segregate findings
of fact from conclusions of law; to the extent any one of the Court’s factual findings
might be more appropriately viewed as a conclusion of law, that finding of fact may
be considered the Court's conclusion of law on that point. The Court has considered
Delaware caselaw defining the legal precepts applicable to the claims and defenses
69 See, e.g., Torres v. Bishop, 2021 WL 6053870, at *4 (Del. Super. Ct. Dec. 21, 2021) (citing Pencander Associated, LLC v. Synergy Direct Mortg. Inc., 2010 WL 2681862, at *2 (Del. Super. Ct. June 30, 2010)). 70 Mundy v. Devon, 906 A.2d 750, 755 (Del. 2006). 71 Pardo v. State, 160 A.3d 1136, 1150 (Del. 2017). 72 Torres, 2021 WL 6053870, at *4.
13 offered by the parties. The Court applied the Delaware Rules of Evidence to the
testimony and exhibits and, in its deliberation, has relied only upon that which would
be admissible under those rules. And the Court has considered each party’s
arguments on their respective theory of the case and any weight to be assigned to
testimony or evidence.
14 ANALYSIS
Unico seeks to recover the $380,000 it paid Lofty. To do so, Unico asserts
claims of unjust enrichment, assumpsit, and declaratory judgment.73 To justify its
retention of Unico’s funding, Lofty alleges Unico committed tortious interference
with contract, fraudulent misrepresentation, breaches of contracts, breach of the
implied covenant of good faith and fair dealing, and seeks recovery based on
quantum meruit.74 The Court addresses each party’s claims in turn.
As an initial matter, the enforceability of the negotiated contracts must be
addressed. Lofty alone, and together with Unico, entered into three contracts with
RDK. By the terms of these agreements, any “controversy or claim relating to [the]
agreement or the breach thereof shall be settled by the courts of Curaçao” and “all
matters related to the validity, interpretation or performance of [the] contract shall
be governed by the laws of Curaçao.”75 Although these agreements provide some
context to the dispute presently before this Court, nothing in this decision should be
construed to address the validity of any terms. As for the terms’ validity, “a valid
73 D.I. 1 (“Compl.”) ¶¶ 14, 19, 26. 74 D.I. 6 (“Def. Ans.”) ¶¶ 42, 50, 53, 58, 60, 64, 66. 75 JX 23 at ¶¶ 19, 20; JX 24 at ¶¶ 19, 20; JX 25 at ¶¶ 19, 20.
15 forum selection clause must be enforced,” and, in accordance with the contracts’
forum selection clauses, this Court defers to the courts and laws of Curaçao.76
At its core, this case involves the dispute between Unico and Lofty over a
failed agency relationship. As explained below, neither the emails surrounding the
Lofty-RDK contract, nor the subsequent discussions of an agency agreement,
formed enforceable contracts between Lofty and Unico. As a result, Lofty must
return to Unico the money Unico: (1) provided to Lofty to send to RDK as a sign of
good faith; and (2) advanced Lofty on projected earnings that never came to fruition.
A. Unico’s Claims
1. Unjust enrichment
Unico contends the $380,000 sent to, and retained by, Lofty unjustly enriched
Lofty at Unico’s expense, and therefore, Unico is entitled to recover this sum.77
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.”78 An unjust enrichment claim may be
76 See Nat’l Indus. Grp. (Holding) v. Carlyle Inv. Mgmt. LLC., 67 A.3d 373 (Del. 2013). 77 Compl. ¶ 14. 78 Fleer Corp. v. Topps Chewing Gum, Inc., 539 A.2d 1060, 1062 (Del. 1988) (quoting 66 Am. Jur. 2d, Restitution and Implied Contracts §3, p. 945 (1973)).
16 brought “as a standalone claim or as a remedy for other claims.”79 To sustain a claim
for unjust enrichment, the plaintiff must establish: “(1) an enrichment, (2) an
impoverishment, (3) a relation between the enrichment and the impoverishment, (4)
the absence of justification, and (5) the absence of a remedy provided by law.”80 An
unjust enrichment claim cannot be made where the parties’ relationship is
“comprehensively governed by a contract.”81 The Superior Court may award
damages for unjust enrichment “when it cannot hold the parties to a formal
agreement but determines that the aggrieved party is entitled to relief for a benefit
conferred on the other party.”82
Unico entered the Lofty-RDK dealings in the eleventh hour at Lofty’s request
and attempted to assist Lofty in fulfilling its obligations under the contract. Unico
assumed no contractual responsibility to either Lofty or RDK. And, while Unico
and Lofty engaged in negotiations aimed at formalizing their relationship, those
terms were never reduced to a mutually agreed upon contract. In the midst of
discussions between the three parties, Unico provided Lofty $380,000. Because no
79 State ex rel. Jennings v. Monsanto Co., 299 A.3d 372, 390 (Del. 2023). 80 Nemec v. Shrader, 991 A.2d 1120, 1130 (Del. 2010). 81 Chumash Capital Investments, LLC v. Grand Mesa Partners, LLC, 2024 WL 1554184, at *14 (Del. Super. Ct. Apr. 10, 2024). 82 Crosse v. BCBSD, Inc., 836 A.2d 492, 497 (Del. 2003).
17 contract governed this payment, this Court may entertain Unico’s unjust enrichment
claim.83
Unico must show a “direct relationship between [Lofty’s] enrichment and
[Unico’s] impoverishment,” and that Unico’s impoverishment was for Lofty’s
benefit.84 There is no question that Unico provided Lofty $380,000.85 Valentini
testified, consistent with Lofty’s own invoice, that the purpose of the $380,000
payment was two-fold.86 First, $250,000 was to be provided to RDK as a sign of
good faith to maintain the Lofty-RDK contract past the original delivery date.87
Second, the remaining $130,000 represented an advance to Lofty for Lofty’s
anticipated fee upon the completion of the first contract.88 The Court finds that
Unico’s impoverishment, benefitted Lofty.
Lofty argues that Unico should not recover based on unjust enrichment
because Unico “received the benefit of its bargain” in the form of a deadline
83 State ex rel. Jennings, 299 A.3d at 391. 84 CoreTel Am., Inc. v. Oak Point Partners, LLC, 2022 WL 2903104, at *11 (Del. Super. Ct. July 21, 2022) (cleaned up) (quoting Vichi v. Koninklijke Philips Elecs. N.V., 62 A.3d 26, 59-60 (Del. Ch. 2012)). 85 D.I. 19 (“Joint Stip.”) at 3. 86 Trial Tr. Day 1 at 60-61. 87 Id. 88 Id.; JX 21.
18 extension.89 But the evidence does not support this argument. When it became clear
to RDK that the products subject to the Lofty-RDK contract would not be lifted,
RDK returned substantially all of the good faith deposit. And, of course, because
the Lofty-RDK contract was never completed, Lofty earned no fee. Unico received
no benefit of any bargain; when dealings collapsed, Lofty held Unico’s money
without justification. The evidence supports Unico’s unjust enrichment claim.
2. Assumpsit
As a fallback to secure the money it provided Lofty, Unico asserts a claim of
assumpsit.90 “[W]henever one person has in his hands money equitably belonging
to another, that other person may recover it by assumpsit for money had and
received. The remedy at law is adequate and complete.”91 Unico’s assumpsit claim
is “quite similar” to its unjust enrichment claim.92 In fact, unjust enrichment, as a
common law claim, developed from the principles underlying assumpsit.93 But,
“assumpsit cannot be maintained on a transaction from which no contract can be
89 D.I. 35 (“Def. Ans. Br.”) 3-4. 90 Compl. ¶ 22. 91 Gaines v. Miller, 111 U.S. 395, 397-98 (1884) (internal citations omitted). 92 D.I. 32 (“Pl. Op. Br.”) 19. 93 Garfield on behalf of ODP Corporation v. Allen, 277 A.3d 296, 347-48 (Del. Ct. Ch. 2022).
19 implied.”94 Thus, if there exists no contract, express or implied, an assumpsit claim
must fail. Unico has the closely related remedy at law – unjust enrichment – that
affords it complete relief, and Unico has met its burden in proving that claim. In the
absence of a contract, the evidence does not support Unico’s assumpsit claim.
3. Declaratory Judgment.
As a final backstop, Unico seeks a declaratory judgment ordering Lofty to
return the $380,000.95 Superior Court Civil Rule 57 provides, “[t]he existence of
another adequate remedy does not preclude a judgment for declaratory relief in cases
where it is appropriate.”96 The Court possesses discretion to issue a declaratory
judgment so long as the action presents an “actual controversy.”97 For an “actual
controversy” to exist, four elements must be satisfied:
(1) It must be a controversy involving the rights or other legal relations of the party seeking declaratory relief; (2) it must be a controversy in which the claim of right or other legal interest is asserted against one who has an interest in contesting the claim; (3) the controversy must be
94 Hutton v. Wetherald, 1848 WL 802, at *1 (Del. Super. Ct. Apr. 1, 1848); Knowles v. Massey, 81 A. 470, 471 (Del. Super. Ct. 1908) (“In order to support [an] action of assumpsit, it is incumbent on the plaintiff to show from a preponderance of the evidence that there was a contract, express or implied in law between him and the defendant.”). 95 Compl. ¶¶ 24-26. 96 Super. Ct. Civ. R. 57. 97 XL Specialty Ins. Co. v. WMI Liquidating Trust, 93 A.2d 1208, 1216 (Del. 2014).
20 between parties whose interests are real and adverse; and (4) the issue involved in the controversy must be ripe for judicial determination.98
Although evidence exists to satisfy each of these four elements, “[w]here a
plaintiff seeks a declaratory judgment, it must show that, absent a favorable outcome
in the litigation, the defendant’s wrongful conduct will go unchecked.”99 An action
for declaratory judgment is precluded “where the defendant ceased engaging in the
contested conduct before the complaint was filed unless the plaintiff can prove a real
and immediate risk of future injury.”100 Unico does not meet that burden here.
Unico does not allege, nor do the facts support, the existence of a future harm.
Instead, Unico argues “it is entitled to a declaratory judgment that it is entitled to
return of all funds remitted to Lofty.”101 The Court declines to enter a declaratory
judgment on these facts.
98 In re COVID-Related Restrictions on Religious Services, 326 A.3d 626, 642-43 (Del. 2024) (quoting Rollins Int’l v. Int’l Hydronics Corp., 303 A.2d 660, 662-63 (Del. 1973)). 99 Employers Ins. Co. of Wausau v. First State Orthopaedics, P.A., 312 A.3d 597, 613 (Del. 2024). 100 Id. at 613-14. 101 Pl. Op. Br. 21.
21 B. Lofty’s Claims
1. Tortious Interference
Lofty contends Unico’s failure to take delivery of the products under the first
agreement constituted an intentional act that caused Lofty to breach its contract with
RDK.102 To prevail on a claim for tortious interference with contract under Delaware
law, the plaintiff must show, “(1) a contract, (2) about which defendant knew, and
(3) an intentional act that is a significant factor in causing the breach of such contract,
(4) without justification, (5) which causes injury.”103 When tortious interference
with contract is alleged against a corporate defendant, the plaintiff must show the
corporate defendant “was not pursuing in good faith the legitimate profit seeking
activities of [its] affiliated enterprise []” that was a party to the contract.104 Further,
there can be no tortious interference with contract unless the defendant “sought
maliciously or in bad faith to injure plaintiff.”105
The evidence does not establish that Unico acted maliciously or in bad faith
to cause a breach of Lofty’s contract with RDK. Unico was not a party to the First
102 Def. Ans. ¶¶ 42-44. 103 Bhole, Inc. v. Shore Inv., Inc., 67 A.3d 444, 453 (Del. 2013) (quoting Irwin & Leighton, Inc. v. W.M. Anderson Co., 532 A.2d 983, 992 (Del. Ch. 1987)). 104 Id. 105 Id.
22 Contract.106 The question is not simply whether Unico’s failure to take delivery
constituted an “intentional act that [was] a significant factor in causing the
breach.”107 Instead, the Court must assess whether Unico, with malice or bad faith,
affirmatively acted to prevent Lofty from performing its obligations under the First
Contract.108 It did not.
Lofty drafted Unico to do what it, Lofty, could not – pay for and transport
commodities. Despite efforts to do so, Unico failed to charter an accepted vessel to
fulfill Lofty’s obligation to RDK.109 Unico worked to secure a ship and funded a
good faith payment to RDK to extend the window to take delivery of the product on
Lofty’s behalf. Unico’s failure to take delivery does not represent a malicious effort
to injure Lofty. Without Unico, or another capable buyer and transporter, Lofty
could not fulfill its negotiated agreement. And Lofty had no intention of paying for
or lifting the products. Unico’s failed attempt to save Lofty does not constitute
intentional interference.
106 Def. Ans. ¶ 41. 107 Def. Ans. Br. 10. 108 See Bhole, Inc., 67 A.3d at 453. 109 D.I. 34 (“Pl. Ans. Br.”) 20; D.I. 31 (“Def. Op. Br.”) 22.
23 2. Breach of Contract – First Contract
Lofty contends Unico breached a contract they formed through the parties’
email exchanges.110 To prove this claim, Lofty must establish: “(1) the existence of
a contractual obligation, (2) a breach of that obligation, and (3) damages resulting
from the breach.”111 Under Delaware law, contracts are construed objectively,
meaning how they would be understood by an “objective, reasonable third party.”112
It is axiomatic that, for there to be a breach of contract, there must first be a
valid contract. A valid and enforceable contract exists when: “(1) the parties
intended that the instrument would bind them, demonstrated at least in part by its
inclusion of all material terms; (2) those terms are sufficiently definite; and (3) the
putative agreement is supported by legal consideration.”113 The “overt manifestation
of assent – not subjective intent – controls the formation of a contract.”114 To
determine whether the parties intended to be bound, the Court considers the parties’
communications preceding the execution of a signed agreement.115 A signed writing
110 Def. Op. Br. 10-17. 111 Active Day OH, Inc. v. Wehr, 2024 WL 3201167, at *3 (Del. Super. Ct. June 27, 2024). 112 Zenith Energy Terminals Joliet Holdings LLC v. CenterPoint Props. Tr., 2023 WL 615997, at *9 (Del. Super. Ct. Jan. 23, 2023). 113 Eagle Force Holdings, LLC v. Campbell, 187 A.3d 1209, 1229 (Del. 2018). 114 Id. 115 Id.
24 “generally offers the most powerful and persuasive evidence of the parties’ intent to
be bound.”116 No such writing exists here. The Court must determine whether the
communications between Lofty and Unico objectively manifested their mutual
intent to be bound by terms proffered in the parties’ email exchanges. They do not.
The email exchange establishes that neither Unico nor Lofty intended to be
bound by the terms of those communications. Twenty-first century communication
– here, email – provides an efficient negotiating platform, but the acquired efficiency
does not dispense with the requirement that, fundamentally, a contract must be
premised upon a meeting of the minds. That did not occur. Unico emailed Lofty
with what it defined as a “synopsis” of the two parties’ phone call.117 Unico
conveyed an outline of discussions with Lofty and concluded by requesting that
Lofty “advise [Unico] if there are any other points of importance” that must be
addressed.118
Lofty’s response evidences its contemplation or negotiation of an agreement
and not its intent to be legally bound by the email exchanges. Lofty began its email
by recognizing Unico’s “interest” in a sale contract.119 The email, a marked up
116 Id. 117 JX 13. 118 Id. 119 Id.
25 version of Unico’s communication, summarized the ongoing negotiations.120 Lofty
annotated Unico’s “synopsis,” and added terms, such as a proposed pricing formula,
absent from Unico’s email.121 Lofty concluded by inquiring whether “there is any
more information that will be required,” and committed to “send the contract
soon.”122 Lofty’s writings reflect its understanding that neither party was yet bound
by the terms discussed in the email exchanges. The evidence fails to establish a
contractual relationship between Unico and Lofty. Without a contract, there can be
no breach.
3. Fraudulent Misrepresentation.
Lofty, in its fraudulent misrepresentation claim, asserts that Unico
misrepresented its ability to lift the products during the delivery period.123 This
misrepresentation, Lofty contends, resulted in Lofty’s injury.124 To support this
claim, Lofty must prove:
(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; (3) an intent to induce the plaintiff to act or refrain from acting; (4) the plaintiff’s
120 Id. 121 Id. 122 Id. 123 Def. Ans. ¶ 53. 124 Id. ¶ 54.
26 action or inaction taken in justifiable reliance upon the representation; and (5) damages to the plaintiff as a result of such reliance.125
The evidence does not support this claim. Lofty argues “Unico knew all along
that it would not lift the product because it did not have a proper vessel.” 126 But
there is a difference between failing to fulfill a promise despite efforts to do so, and
fraudulent misrepresentation. To support a claim of fraudulent misrepresentation
Lofty must establish that Unico knew or believed its representation was false.127 No
record evidence supports the finding that Unico “knew all along” it did not have a
proper vessel.128 Rather, Unico tried and failed to save Lofty (as to the first contract)
and fulfill their joint commitment to RDK (as to the second and third contracts).
Lofty contractually bound itself to RDK under the First Contract before
bringing Unico into the transaction.129 It follows that paying for and lifting the
products were Lofty’s contractual obligations alone. Yet Lofty did nothing to
nominate a vessel to lift the products.130 Unico is not to blame for Lofty’s failure to
meet its contractual obligations, and no evidence supports this claim. Because Lofty
125 Gillespie v. Carper, 2024 WL 4709937, at *2 (Del. Super. Ct. Nov. 7, 2024) (quoting Lord v. Souder, 748 A.2d 393, 402 (Del. 2000)). 126 Def. Ans. Br. 10. 127 Gillespie, 2024 WL 4709937, at *2 (citing Lord, 748 A.2d at 402). 128 Def. Ans. Br. 10. 129 Pl. Op. Br. 27. 130 Trial Tr. Day 1 at 98, 198.
27 fails to offer factual support that Unico knowingly made false representations,
Lofty’s claim for fraudulent misrepresentation fails.
4. Breach of Contract – Second and Third Contracts
Lofty contends “Unico’s failure to lift the products identified in the Second
Contract and Third Contract caused Lofty Links and Unico to breach those
agreements.”131 As noted above, to establish the breach of contract claim, Lofty
must prove, “(1) the existence of a contractual obligation, (2) a breach of that
obligation, and (3) damages resulting from the breach.”132 Unico and Lofty stood as
partners on the Second and Third Contracts, and thus were equally responsible for
the contractual obligations.133 Iyengar admitted that Lofty relied on Unico to charter
a vessel, but nothing in the Second or Third Contract placed this responsibility solely
on Unico.134 To be sure, Lofty made no effort to obtain a vessel on its own.135
Further, the Court finds that, though Unico and Lofty contemplated an agency
relationship, no formal relationship was formed. With no Agency Agreement, there
is no support for Lofty’s contention that Unico’s failure to secure a vessel “put Lofty
131 Def. Op. Br. 24. 132 See, e.g., Active Day OH, Inc., 2024 WL 3201167, at *3. 133 JX 24; JX 25; Pl. Op. Br. 28; Def. Op. Br. 24. 134 Trial Tr. Day 1 at 247. 135 Id. at 248.
28 Links at risk of breaching [its agreements with RDK].”136 Lofty and Unico’s
contractual responsibilities in relation to the Second and Third Contract were
concomitant and owed by both to RDK. Thus, both Lofty and Unico were at risk of
breaching the second and third contracts for their failure to lift the product. Lofty
contends it terminated the agreements with RDK “pursuant to its duty to mitigate its
damages.”137 But it was RDK – not Lofty – who stood to be injured as a result of
Unico and Lofty’s breach. Damages are assessed in contract-based claims “to place
the injured party in an action for breach of contract in the same place as he would
have been if the contract had been performed.”138 And, as noted above, this Court
is not the forum for enforcing the Second or Third Contracts. The evidence does not
establish Unico breached any express or implied obligation to Lofty.
5. Breach of the Implied Covenant of Good Faith and Fair Dealing
Lofty contends that Unico breached the implied covenant of good faith and
fair dealing because it excluded Lofty while “attempting to negotiate separate
contracts with RDK NV.”139 The implied covenant of good faith and fair dealing is
“a limited and extraordinary remedy” that only rectifies events that “could not
136 Def. Ans. Br. 12. 137 Id. 138 Paul v. Deloitte & Touche, LLP, 974 A.2d 140, 146 (Del. 2009). 139 Def. Ans. ¶ 60.
29 reasonably have been anticipated at the time the parties contracted.”140 To succeed
on its claim that Unico breached the implied covenant, Lofty “must allege a specific
obligation implied in the contract, a breach of that obligation, and resulting
damages.”141 The Court may imply contract terms only when there exist allegations
that the other party’s unreasonable or arbitrary conduct “frustrat[ed] the fruits of the
bargain that the asserting party reasonably expected.”142 In evaluating whether
conduct was unreasonable or arbitrary, the Court must consider the parties’
reasonable expectations at the time the contract was written, and avoid rewriting the
contract to appease the party who believes they got a bad deal.143
The claim fails from the start. The evidence does not support the existence of
a contract between Lofty and Unico. In the absence of a contract, no specific
unwritten term may be implied.144 Nonetheless, without any contractual basis to do
so, after Lofty withdrew from the second and third contracts, Unico assured RDK
that Lofty would receive a benefit if the products were lifted.145 There is no basis to
impose this limited and extraordinary remedy.
140 Beyond Risk Topco Holdings, L.P. v. Chandler, 2024 WL 4369239, at *19 (Del. Super. Ct. Sept. 24, 2024) (internal citations omitted). 141 Id. 142 Nemec, 991 A.2d at 1126. 143 Nemec, 991 A.2d at 1126. 144 Murfey v. WHC Ventures, LLC, 236 A.3d 337, 357 (Del. 2020). 145 Trial Tr. Day 2 at 66; JX 22 at 5.
30 6. Breach of Contract – Agency Agreement
Lofty contends the evidence “reflects the parties’ intent to be bound” by the
negotiated terms in the Agency Agreement, and “[t]he Agency Agreement is,
therefore, a valid and enforceable contract.”146 As explained, a breach of contract
claim requires that a valid and enforceable contract exist between the parties.147
Here, Unico did not express an intent to be bound by the proposed Agency
Agreement. Valentini testified that when Lofty sent a copy with its signature on it,
content within the proposed Agency Agreement “was never even discussed.”148
From Unico’s perspective, “[Lofty] just prepared the documents, signed it, and sent
it to [Unico] without even giving [Unico] the opportunity to review [the proposed
Agency Agreement.]”149 Valentini’s testimony is supported by his response to the
proposal. When Iyengar forwarded the proposed Agency Agreement to Unico on
January 11, 2022, Unico indicated that certain provisions “won’t work for [Unico]”
and that “[Lofty] made changes [Unico] didn’t agree on,” such as law and costs.150
Iyengar testified that Lofty and Unico “never had any discussions” about the Agency
146 Def. Op. Br. 19-20. 147 See, e.g., Active Day OH, Inc., 2024 WL 3201167, at *3. 148 Trial Tr. Day 1 at 80. 149 Id. 150 Id. at 22; JX 54.
31 Agreement after this response.151 When asked if he knew that “an agency agreement
had not been finalized and signed with Unico,” Iyengar answered, “that’s correct.”152
Iyengar explained that he did not mention the Agency Agreement in Lofty’s
January 30, 2022, termination letter because “Unico never signed the agreement, any
of those agreements. Neither the purchase agreement, nor the Agency
Agreement.”153 Iyengar may have subjectively believed that the emails represented
an Agency Agreement, but an objective assessment does not reveal a legally
enforceable contract arising from the electronic communications. Again, in the
absence of an executed contract – the Agency Agreement – Lofty’s breach of
contract claim fails. And, because there was no contract, Lofty’s assumpsit claim
also fails.154
7. Quantum Meruit
Lofty contends that because the Agency Agreement “states that Unico will
compensate Lofty Links, as its agent, by paying it a commission,” Lofty is entitled
to damages in the form of quantum meruit.155 Quantum meruit is a “quasi-contract
151 Trial Tr. Day 2 at 96. 152 Id. at 93. 153 Id. 154 Hutton, 1848 WL 802, at *1 (holding that a claim for assumpsit “cannot be maintained on a transaction from which no contract can be implied.”). 155 Def. Op. Br. 28.
32 claim that allows a party to recover the reasonable value of his or her services if: (i)
the party performed the services with the expectation that the recipient would pay
for them; and (ii) the recipient should have known that the party expected to be
paid.”156 A quasi-contract is “one where the law will infer the existence of a
contractual relationship without regard to the actual intention of the parties where
circumstances are such that justice warrants a recovery as though there had been a
promise or contract.”157
Here, the Court cannot infer the existence of a contractual relationship based
on the proposed Agency Agreement. Certainly, Lofty expected to be paid. But
recovery based on quantum meruit is a two-pronged test.158 Lofty’s expectation of
payment does not by itself warrant recovery in the form of quantum meruit; it must
be shown that Unico should have known, based on the Agency Agreement, Lofty
expected to be paid.159 The evidence does not show this.
Rather, the evidence establishes that, for the first contract, Lofty would not
reap a benefit until the product was resold for a price at, near, or above the Platts
156 Petrosky v. Peterson, 859 A.2d 77, 79 (Del. 2004). 157 LCT Capital, LLC v. NGL Energy Partners LP, 2022 WL 17851423, at *4 (Del. Super. Ct. Dec. 22, 2022). 158 See Petrosky, 859 A.2d at 79. 159 See Petrosky, 859 A.2d at 79.
33 Quote. By assuming a position “in the shoes”160 of Lofty, Unico agreed to pay for
and lift the product Lofty contracted to buy from RDK. Curiously, Lofty attempted
to conceal its negotiated price to increase its earnings,161 but it is unclear how Lofty
expected to complete the transaction without revealing this price to Unico. Of
course, Lofty eventually revealed the full terms of its contract with RDK. 162 But,
the fact remains that a discount on a purchase does not directly translate into an
earned profit. Based upon the evidence offered at trial, to profit on the brokering of
commodities, Lofty would need to resell the product at a price greater than its
purchase price. Put simply, a discount does not equate to profit. And, as evidenced
by the difficulty in lifting these products, the Court cannot conclude that a
subsequent sale near, at, or above the Platts quote would necessarily occur. The
evidence established that this is an industry where earnings are seen in the margins.
And here, no margin was ever realized.
A different, equally straightforward, assessment guides the Court to reject
Lofty’s quantum meruit claim as to the second and third contracts. As an initial
matter, the evidence revealed Lofty did little more than introduce Unico to RDK.
And that introduction, and the revelation that RDK possessed more commodities for
160 Trial Tr. Day 1 at 268-69. 161 Id. at 63. 162 Id.
34 sale, was effectively completed when Unico agreed to attempt to save Lofty’s first
failing contract. Nonetheless, Unico committed to compensate Lofty upon the
delivery of the commodities subject to the second and third contracts. But, of course,
the products were never delivered. Absent delivery, Lofty can sustain no claim
under the theory of quantum meruit.
The evidence is insufficient to support a quantum meruit claim for work Lofty
alleges it performed to sustain the three contracts. Without further explanation,
Lofty contends it “spent Unico’s money while trying to pitch [the] products to other
third parties,” 163 inspections, consultants, travel, “and those kinds of things we had
to do.”164 Lofty offered no evidence of discrete expenditures or tasks performed in
furtherance of the First, Second, or Third contracts. Nor is there evidence that Unico
should have known that it would be responsible for any of these fees.
There is evidence of expenditures on behalf of Unico and Lofty for lab testing
of products subject to the various contracts.165 To the extent these services fall
within “inspections” or “those kinds of things [Lofty] had to do,” the Court will
consider them here as part of Lofty’s quantum meruit claim. Valentini
163 Trial Tr. Day 2 at 107-108. 164 Trial Tr. Day 1 at 302-303. 165 JX 35, 36. Unico objected to the admission of these documents at trial and the parties agreed to address their admissibility in post-trial briefing. The Court finds that a sufficient foundation has been offered and the exhibits are, thus, admitted.
35 acknowledged that a sum was paid for testing and expressed his understanding that
the cost of that testing accounts for the difference between the $250,000 paid to RDK
and the $227,000 RDK returned to Lofty.166 Further, Lofty asserts that it used
Unico’s funding to pay the second invoice.167 The Court finds that the evidence
supports Lofty’s payment of these invoices – $23,807.00 and $17,795.90. These
expenses have been paid from the money Unico provided Lofty; because Lofty
prevails on this claim, the result is that Lofty is not required to reimburse Unico for
$41,602.90 of the $380,000.00.
C. Attorneys Fees
Both Unico and Lofty have requested the award of attorneys fees and costs.
Delaware follows the American Rule which provides that each side pays its own
attorneys’ fees and costs.168 “Aside from express statutory authorization, Delaware
recognizes only a limited number of exceptions to the American Rule.169 The Court
does not find the evidence supports any recognized exception to the American Rule,
thus, neither party is awarded attorneys’ fees or costs.
166 Trial Tr. Day 1 at 129. 167 Trial Tr. Day 1 at 311. 168 In re Delaware Public Schools Litigation, 312 A.3d 703, 715-16 (Del. 2024). 169 Id. at 716.
36 CONCLUSION
Lofty’s ambition exceeded its capacity to perform. Unico came to Lofty’s aid
and endeavored to support Lofty through its first contract and partner with Lofty on
subsequent contracts. The business plan involved rapidly “flipping” a substantial
quantity of internationally sanctioned commodities. With the benefit of hindsight,
it may appear obvious that this arrangement was doomed to fail. But Lofty may not
retain the money put forth by Unico to, for a time, keep the venture afloat. Lofty
shall return to Unico $338,397.10 plus prejudgment interest.
IT IS SO ORDERED
Sean P. Lugg, Judge