Goal Media Group, Inc. v. Teamtalk.com Group, PLC, et al.

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June 18, 2003 David A. Jenkins, Esqu ire Smith, Katzenstein & Furlow LLP P.O. Box 410 Wilmington, DE 19899 Peter B. Ladig, Esquire Richards, Layton & Finger P.O. Box 551 Wilmington, DE 19899 RE: Goa l Me dia G roup , Inc., v. T eam talk.com Grou p, PLC , et al. C.A. No. 01C-11-023 WCC Submitted: June 6, 2003 Decided: June 18, 2003 On Defendants Motion for Summary Judgment. Denied. Dea r Cou nsel: Since the ora l argum ent on June 6, 2003, the Court has reviewed the caselaw provided by counsel relating to the Motion for Summary Judgment having the benefit of the oral argument presentation. Unfortunately, the Court has been in trial since the time of the oral argument and time does not allow for an extensive opinion concerning the motion as this trial is s et to be gin ne xt we ek. Th erefo re, the C ourt w ill issue this short letter opinion to decide the motion. It is clear that a party to a contract may defend its alleged breach on the grounds that there exists a legal excuse for its nonperformance, even if they were ignorant of that reason at the tim e the con tract f ailed . Quoting Justice Brandeis Opinion in College Point Boat Corporation v. United States, 267 U .S. 12, 1 5 (19 25), V ice Ch ance llor Bro wn s tated in Bryw il, Inc., v. ST P Cor poratio n, 1980 W L 77945 at *10 (Del. Ch.): A party to a contract who is sued for its breach may ordinarily defend on the ground that there existed, at the time, a legal excuse for nonperformance by him although he was then ignorant of the fact. He may, likewise, justify an asserted termination, rescission, or repudiation, of a contract by proving that there was, at the time, an adequate cause, although it did not become known to him until la ter. To the sam e effe ct: Pots Unlimited, Ltd. v. United States, 600 F.2d 790 (Ct.Claims 1979 ); Western Auto Supply Co. v. Sullivan, 210 F.2d 36 (8 th Cir. 1954) Williston, Co ntracts (3 rd Ed.) § 839; Restatement of Contracts § 278. Moreov er, whe re suf ficient g roun ds for the term ination of a co ntract e xist, it is immaterial that the alleged motivation for the termination was a ttributab le to an u nrela ted re ason . Barisa v. Charitable Research Foundation, Inc., Del.S upe r., 287 A.2d 679 (197 2), affirmed, Del.Supr. 290 A.2d 430 (19 72). There are thr ee are as that th e defe ndan ts claim fit this principal of law. They are (1) the non- disclos ure of Serg io Ferraro s new employment contract, (2) the apportionment of expenses for August, September and October, and (3) the improper disclosure of the letter o f inten t. As the Cou rt indica ted at the close o f oral a rgum ent, it is satisfied that ther e exists reasonable factual disputes as to the accounting practices utilized b y Go al M edia so as to preclude summary judgment as to claim #2 above. Further, as to the disclosure issue, plaintiff asserts that any disclosure complained of by the defendant was required in order to obtain the necessary approvals for the contract or were reasonable internal notifications of its affec ted employees. As such, there also appears to be a factual dispute whether disclosures were appropriate under the letter of intent and thus summary judgment is not appropriate as to this area. This leav es the final a rea r elatin g to th e rec onfig uratio n of M r. Ferraro s employment contra ct. Candidly, the Court is troubled by what appears to be a blatan t attemp t to crea te the illusion of a significantly different employment relationship between Goal Media and Mr. Ferraro who everyone appears to agree wou ld be a key player in the defend ant s evaluation of the v iability of Goa l Me dia s b usine ss. Th e e-m ail cited b y the d efend ant in its memorandum and the creation of a new agreement by Mr. Stoehr would give any reaso nable businessperson pause as to the appropriateness of proceeding with this venture and the credibility and trustworthiness of Mr. Stoehr and Mr. Ferraro. How ever, the Court cannot ignore the explanation given by M r. Stoehr when questioned as to this area. In essence, Mr. Stoehr asserts that the employment modifications were the product of discussions occurring over a lengthy period of time prior to the letter of intent being executed and was simply his attempt to bring those discussions to a finality, recognizing that Mr. Ferraro would be included in the defendant s plans for the operation of the venture if the letter of intent lead to the purch ase of the bu siness by the defen dants . Wh ether th is explanation is a reasonable version of the events by the plaintiff or whether the actions of the plaintiff provided a justifiable cause for the defendant not to proceed with the letter of intent is a fac tual disp ute tha t the Co urt find s app ropria te for th e jury to decid e. This is not a clear cut fraudulent representation without any plausible explanation, and thus the Court cannot justify the extreme measure of summary judgment effec tively stopping the litigation. As a resu lt of the a bove , the de fenda nt s M otion fo r Sum mary Judg men t is DENIED. The trial will proceed as scheduled on Monday, June 23, 2003. This Opinion does not preclude the defendant from again requesting a directed verdict at the conclusion of the trial based upon similar grou nds o r from reque sting ap prop riate jury instructions in this area. The Court also intend s to giv e the d efend ant sign ificant la titude in fully ex ploring this area if Mr. Stoehr testifies. Again, the Co urt apologizes for the brevity of this O pinion but ho pefully this guid ance will all ow y ou to proc eed f orw ard. Sincerely yours, Judge W illiam C. Carpenter, Jr. WCCjr:twp cc: Prothonotary