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Khushaim v. Tullow Inc.

Superior Court of Delaware

August 16, 2017

HASAN KHUSHAIM, Plaintiff,
v.
TULLOW INC. d/b/a APPOSTROPHIC, APPOSTROPHIC LLC, OUTREACH GLOBAL, LTD., and NATHAN GIBSON, Defendants.

          Submitted: June 27, 2017

         Upon Defendant's Motion for Partial Summary Judgment, DENIED.

          Gordon J. Zuiderweg, Esquire (pro hac vice), Law Offices of Barry K. Rothman, Los Angeles, California, Nicholas G. Kondraschow, Esquire (argued), Rhodunda & Williams, Wilmington, Delaware, Attorneys for Plaintiff.

          Todd A. Holleman, Esquire, Robert E. Murkowski, Esquire, Miller, Canfield, Paddock and Stone, PLC, Detroit, Michigan, John A. Sensing, Esquire (argued), Potter Anderson & Corroon LLP, Attorneys for Defendant, Tullow Inc.

          MEMORANDUM OPINION AND ORDER

          Paul R. Wallace, Judge.

         I. Introduction

         Before the Court is Defendant Tullow, Inc.'s d/b/a Appostrophic ("Tullow") Motion for Partial Summary Judgment of Count I of Plaintiff Hasan Khushaim's ("Khushaim") Complaint. In January 2013, Khushaim hired Tullow to design and build certain mobile applications. Tullow was to be paid in four installments totaling $75, 000. The parties memorialized the terms of their agreement in a "Project Development Contract" dated January 29, 2013. Khushaim complains that Tullow breached this contract by failing to deliver the completed mobile applications. Among other things, Khushaim's breach-of-contract claim alleges future lost profits. Tullow maintains that Khushaim has failed to submit any admissible evidence in support of that damages claim and that partial summary judgment is warranted. For the reasons set forth below, Tullow's Motion is DENIED.

         II. Factual and Procedural Background

         Plaintiff Khushaim brought this action against Defendant Tullow in a ten-count complaint.[1] Tullow filed a dismissal motion, which this Court granted in part and denied in part.[2] Count I, alleging breach of contract, is the only surviving claim.[3] Tullow now asks for partial summary judgment on that remaining claim.

         In January 2013, Khushaim, a citizen of Saudi Arabia, and Tullow, a Delaware corporation, entered into a Project Development Contract ("the Contract").[4] The Contract provided that Tullow would "design, develop, and implement" mobile applications adapting two Arabic card games ("Trix" and "Belote") for mobile use.[5]The Contract had a completion period of 250 days and specified a schedule of four payments of $18, 750.00, for a total anticipated contract value of $75, 000.[6] The Contract included a Delaware choice-of-law provision.[7]

         Khushaim says he made the first three payments, but not the fourth and final because the Contract's fourth phase, "Deployment, " never occurred.[8] Khushaim says further that in addition to the first three regular installments, he paid Tullow a supplement of $20, 000 in May 2013 for upgrades to the programs.[9] Khushaim claims he never received the final versions of the two mobile applications and that he has been unable to "obtain the return of his copyrighted software designs."[10]

         Khushaim alleges that "as a result of Tullow's failure to complete development of the mobile applications for Trix and Belote, Khushaim lost subscription sales for the two games, which would have totaled $27, 000, 000.00."[11] Tullow filed this Motion for Partial Summary Judgment to limit Khushaim's damages for the breach-of-contract claim to $75, 000.

         The Court heard oral argument on this Motion and addressed Khushaim's lack of evidence to support his surviving claim of $27 million in lost profits.[12] The speculative nature of the alleged $27 million in future lost profits was discussed previously during oral argument on an earlier motion to dismiss.[13] Again, at the time of this Motion, the Court was concerned that Khushaim had still failed to offer any evidence to support a "reasonable certainty... of potential lost profits."[14] Khushaim had also failed to submit a responsive affidavit pursuant to Superior Court Civil Rule 56(f).[15]

         Because no scheduling order preceded this Motion, and because Khushaim appeared to have anticipated being able to produce evidence to support his claim, the Court granted limited discovery on the particular issue of the $27 million in lost future profits.[16] The Court allowed the parties 120 days to conduct discovery and 30 days from the close of that discovery to submit supplemental briefs.[17]

         The parties recently submitted those supplemental briefs. Khushaim attached exhibits he suggests support his $27 million future lost profits claim.[18] These exhibits include: (1) Tullow's Interrogatories and Requests for Production; (2) a record of payment to another software development company; (3) a market research report from the digital marketing agency MKT Indeed (the "MKT report"); (4) the resume of Khushaim's proposed expert, Dr. Michael Einhorn; (5) Dr. Einhorn's Expert Report; (6) Khushaim's Interrogatories and Requests for Production; and (7) the Project Development Contract.[19]

         Tullow argues that Khushaim "fails to support his claim for lost profits with any admissible evidence."[20] Tullow specifically disputes the qualifications of Khushaim's expert[21] and the reliability of the MKT report.[22] As such, Tullow requests that the Court grant partial summary judgment in its favor.[23]

         III. Discussion

         The entirety of Tullow's argument rests on the alleged inadmissibility of Khushaim's proposed lost profit valuation evidence. But its request that the Court determine the admissibility of Khushaim's evidence comes too soon and is far too cursory.[24] True, the Court should consider only "admissible evidence in deciding a motion for summary judgment."[25] And for an expert and his report to be admitted into evidence, the proponent of the proffered expert testimony eventually bears the burden of establishing the testimony's relevance, reliability, and admissibility by a preponderance of the evidence.[26]

         Delaware Rule of Evidence 702 governs the admissibility of such expert testimony. And Rule 702 provides that "a witness qualified as an expert by knowledge, skill, experience, training or education may testify thereto in the form of an opinion or otherwise, if (1) the testimony is based upon sufficient facts or data, (2) the testimony is the product of reliable principles and methods, ...


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