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Beta Data Services Inc. v. Verizon Federal, Inc.

Superior Court of Delaware, New Castle

February 23, 2015

BETA DATA SERVICES, INC. Plaintiff,
v.
VERIZON FEDERAL, INC. Defendant.

Submitted: January 8, 2015

Upon Consideration of Plaintiff's Motion to Amend Complaint GRANTED in part and DENIED in part

Lawrence Harbin, Esquire, Harbin & Hein PLLC, Washington, District of Columbia and Xiaojuan Carrie Huang, Esquire, Wilmington, Delaware Attorneys for Plaintiff.

Sean F. Murphy, Esquire, and Christopher L. Harlow, Esquire, McGuireWoods LLP, McLean, Virginia and Gregory P. Williams, Esquire, and Chad M. Shandler, Esquire, Richards, Layton & Finger, P.A., Wilmington, Delaware Attorneys for Defendant.

JURY TRIAL DEMANDED

ERIC M. DAVIS JUDGE

I. Introduction and Procedural History

This is a breach-of-contract action brought by Plaintiff Beta Data Services, Inc. ("Beta Data") against Defendant Verizon Federal, Inc. ("Verizon"). Beta Data seeks unpaid amounts charged to Verizon under a purported retroactive increase in billing rates for subcontractor services. Beta Data alleges that Verizon was incorrectly billed at a lower, five-year contract rate as opposed to Beta Data's higher, month-to-month rate. Beta Data contends that it charged the lower rate because the parties intended to enter into a five-year written agreement that was never formally executed by the parties.

In the Complaint, Beta Data seeks $4, 815, 941.86 in damages. Beta Data contends that this amount represents the difference between Beta Data's higher, month-to-month rate and the amounts originally invoiced. Beta Data alleges that the amounts originally invoiced were improperly billed to Verizon under the lower, five-year rate.

On March 13, 2014, Verizon filed a motion to dismiss. The Court held a hearing on the matter on May 19, 2014. At the hearing, Beta Data discussed potentially raising claims of fraud or detrimental reliance. The Court advised Beta Data that if it wished to proceed based on either of those theories, Beta Data must file an amended complaint raising those claims. Thereafter, the Court denied Verizon's Motion to Dismiss in an opinion dated August 26, 2014 (the "August Opinion").[1] At that time, the Court held that Virginia has the most significant relationship to this action and applied Virginia law when ruling on Verizon's Motion to Dismiss. The Court set out the facts of this case in detail in the August Opinion and will not repeat those facts in this decision.

On December 12, 2014, Beta Data filed Plaintiff's Motion to Amend Complaint (the "Motion") adding Count II (Fraud and Deceit), Count III (Detrimental Reliance), and Count IV (Breach of Five-Year Oral Agreement). On December 30, 2014, Verizon filed its Opposition to Motion to Amend Complaint (the "Response"). A hearing was held on the Motion on January 5, 2015, at which time the Court reserved decision and gave Beta Data leave to file a reply. On January 8, 2015, Beta Data filed Plaintiff's Reply to Verizon's Opposition to Motion to Amend (the "Reply").

Parties' Contentions

Verizon makes a number of arguments in support of the Response. Verizon first contends that Count II (Fraud and Deceit) and Count IV (Breach of Five-Year Oral Agreement) are barred by Virginia's two year statute of limitations for fraud claims. Second, Verizon claims that Count III (Detrimental Reliance) should be dismissed because it is not a recognized cause of action in Virginia. Third, Verizon argues that Count IV (Breach of Five-Year Oral Agreement) is void under the statute of frauds.

Beta Data addresses each of Verizon's arguments in the Reply. Beta Data contends that Count II (Fraud and Deceit) is not barred by the statue of limitations as several alleged acts of fraud occurred within the statute of frauds period. Beta Data argues that Maryland law should apply to Count III (Detrimental Reliance). As to Count IV (Breach of Five-Year Oral Agreement), Beta Data contends that the longer three-year statute of limitations period ...


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