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Yu v. GSM Nation, LLC

Superior Court of Delaware

April 24, 2018

WARREN DAVID YU, Plaintiff,
v.
GSM NATION, LLC, AHMED KHATTAK, U.S. MOBILE LLC, and U.S. MOBILE INC., Defendants.

          Date Submitted: January 30, 2018

         Upon Defendant GSM Nation, LLC's Motion to Dismiss Counts II, III, and IV of the Amended Complaint: GRANTED in part, and DENIED in part.

         Upon Defendant Ahmed Khattak's Motion to Dismiss Counts II, III, IV, and V of the Amended Complaint: GRANTED.

         Upon Defendant U.S. Mobile LLC's Motion to Dismiss Counts III, IV, and V of the Amended Complaint: GRANTED in part, and DENIED in part.

         Upon Defendant U.S. Mobile Inc. 's Motion to Dismiss Counts III, IV, and V of the Amended Complaint: GRANTED.

          David A. Dorey, Esquire (argued), Larry R. Wood, Jr., Esquire, Adam V. Orlacchio, Esquire, Craig N. Haring, Esquire, of Blank Rome LLP, 1201 N. Market Street, Suite 800, Wilmington, Delaware; and Frank A. Dante, Esquire (pro hac vice), of Blank Rome LLP, One Logan Square, Philadelphia, Pennsylvania, Attorneys for Plaintiff.

          Margaret F. England, Esquire (argued) and Michael Busenkell, Esquire, of Gellert Scali Busenkell & Brown, LLC, Attorneys for Defendant GSM Nation, LLC.

          Alexandra M. Cumings, Esquire (argued) and John P. DiTomo, Esquire (argued), of Morris, Nichols, Arsht & Tunnell LLP, Attorneys for Defendant Ahmed Khattak.

          Blake Rohrbacher, Esquire (argued), Susan M. Hannigan, Esquire, and Katharine L. Mowery, Esquire, of Richards, Layton & Finger, P.A. Attorneys for Defendants U.S. Mobile LLC and U.S. Mobile Inc.

          OPINION

          Jan R. Jurden, Judge

         I. INTRODUCTION

         Plaintiff, Warren David Yu, brings this action against Defendants GSM Nation, LLC ("GSM"), Ahmed Khattak, U.S. Mobile LLC, and U.S. Mobile Inc. (collectively, "Defendants"), alleging Breach of Contract, Fraudulent Inducement, Fraudulent Transfer, Unjust Enrichment, and Tortious Interference in connection with a series of loans Yu made to GSM.[1] Before the Court are Defendants' Motions to Dismiss. For the reasons explained below, all the motions, except Khattak's Motion to Dismiss for lack of personal jurisdiction and GSM's and U.S. Mobile LLC's Motions to Dismiss Yu's fraudulent transfer claim, are GRANTED.

         II. FACTUAL BACKGROUND

         A. The Parties

         GSM is a Delaware limited liability company in the mobile phone retail and wholesale business.[2] Khattak is the chief executive officer, co-founder, and manager of GSM, and owns 85% of the GSM units.[3] Junaid Shams is the other co-founder of GSM.[4] Shams was acquainted with Yu through medical studies at the George Washington University before Yu loaned money to GSM in the series of transactions that gave rise to this controversy.[5] U.S. Mobile Inc. was a Delaware corporation that was merged with and into U.S. Mobile LLC, a Delaware limited liability company, on July 1, 2015.[6] Khattak allegedly controls U.S. Mobile LLC.[7]

         B. The Loan Agreements

         GSM was founded in 2010.[8] In mid-2012, GSM sought to expand by developing a mobile virtual network operator ("MVNO"), which would allow it to provide cellular service plans to its customers.[9] According to the Amended Complaint, GSM was cash strapped at the time, so "[a]t Khattak's request, " Shams approached Yu for the purpose of soliciting loans to GSM, and "GSM represented, through Khattak, " that Yu's loan would supply the capital GSM needed to launch an MVNO.[10] In October 2012, GSM provided Yu with a prospectus that included the plan to form an MVNO as a division of GSM.[11] Yu alleges that based on the prospectus, he loaned $3, 500, 000 to GSM under a series of sixteen separate loan agreements (the "Loan Agreements") from October 15, 2012 through September 1, 2014.[12] The Loan Agreements provide that the loans accrue 12% simple interest, payable monthly, [13] and Yu was entitled to call the loan at any time with 60 days' notice to GSM.[14]

         GSM paid Yu the required monthly interest payments for approximately 34 months[15] and employed personnel to develop MVNO capabilities.[16] Yu alleges Khattak paid himself "a draw" of $10, 000 to $15, 000 per month from GSM while Yu was making loans to GSM.[17] Yu further alleges Khattak used $5, 000 from GSM each month to cover his personal living expenses, [18] and "even tried to buy a luxury car using a cashier's check from GSM."[19]

C. The MVNO

         In April 2013, GSM released an MVNO business plan, which stated that the MVNO GSM was developing would be a part of GSM.[20] Yu alleges that instead of completing the MVNO development within GSM, Khattak applied to the Federal Communications Commission on behalf of U.S. Mobile LLC, on August 14, 2014, to provide global or limited international facilities and resale services.[21] As a result, U.S. Mobile LLC, not GSM, became the MVNO.[22] Yu also alleges, on information and belief, that Khattak caused GSM to purchase cellular phones and transfer them to U.S. Mobile LLC without consideration.[23]D. GSM's Default

         According to the Amended Complaint, GSM paid Yu the required monthly interest payments under the Loan Agreements until early 2016, when GSM's interest check for January 2016 was returned for insufficient funds and the interest check for February 2016 was returned twice for insufficient funds.[24] Because GSM was in default, Yu made a demand for full payment of the debt under the Loan Agreements on February 17, 2016, [25] to which GSM allegedly responded, "given the current state of the business, GSM is not able to repay or service the loan."[26] Yu alleges GSM provided him with a GSM income statement dated December 4, 2015 which showed a net loss of $812, 257, and a GSM balance sheet dated January 31, 2016 which showed total assets of $112, 730, 27 and total liabilities of $4, 403, 083.35.[27] Yu also alleges GSM told him that if he filed suit against GSM, GSM would file for bankruptcy.[28]

         E. Yu Files Suit

         On May 3, 2016, Yu filed a complaint against the Defendants in the Court of Chancery for breach of contract, fraudulent inducement, equitable fraud, fraudulent transfer, unjust enrichment, and sought to pierce the corporate veils of GSM and U.S. Mobile under an alter ego theory of liability against Khattak.[29] Yu also sought "equitable rescission" of the Loan Agreements, "reformation, " a "constructive trust" voiding the transfers from GSM to U.S. Mobile, and an "equitable accounting."[30] Yu filed an amended complaint in Chancery on July 26, 2016.[31]The Court of Chancery dismissed the suit for lack of subject matter jurisdiction on July 7, 2017.[32] According to the Vice Chancellor, the "[allegations] suggest that a monetary judgment is Yu's best remedy to collect the debt he is owed..." and "[a]ssuming Yu succeeds on the merits of his claims, he can obtain that remedy against GSM under the Loan Agreements or against U.S. Mobile LLC as the transferee of a fraudulent transfer."[33]

         Yu transferred his amended complaint from Chancery to this Court on July 20, 2017.[34] Once in Superior Court, he amended his complaint to strike the equitable claims.[35] The Verified Amended Complaint ("Amended Complaint") was filed on October 26, 2017.[36] On November 13, shortly thereafter, the Defendants moved to dismiss.

         III. PARTIES' CONTENTIONS

         Count I of Yu's Amended Complaint alleges a claim for breach of contract against GSM for failure to repay the loans.[37] Count II alleges a claim for fraudulent inducement against GSM and Khattak in connection with the Loan Agreements based on GSM's and Khattak's alleged representations that the MVNO would be developed within GSM.[38] Count III alleges a claim for fraudulent transfer of the loan monies against GSM, Khattak, U.S. Mobile LLC, and U.S. Mobile Inc.[39] Count IV alleges a claim for unjust enrichment against GSM, Khattak, U.S. Mobile LLC, and U.S. Mobile Inc., [40] and Count V alleges a claim for tortious interference against Khattak, U.S. Mobile LLC, and U.S. Mobile Inc.[41]

         Khattak argues the Amended Complaint should be dismissed for lack of personal jurisdiction, failure to state a claim generally, and failure to plead the fraud claims with sufficient particularity.[42] He further contends that even if the Court has personal jurisdiction over him, Yu's fraudulent inducement claim should be dismissed because Yu does not allege any representations made by Khattak, [43]the alleged misrepresentations are statements of future performance that are not actionable, [44] and the fraudulent inducement claim constitutes an impermissible bootstrap to the breach of contract claim.[45] With regard to Yu's fraudulent transfer claim, Khattak argues he is not the transferor or transferee, and because Yu fails to "allege any specific transfer of assets from GSM to U.S. Mobile LLC, " the Amended Complaint fails to meet the particularity standard under Superior Court Civil Rule 9(b).[46] With regard to the unjust enrichment claim, Khattak argues Yu lacks standing as a creditor to complain about the manner in which the loan funds were used, and even if that were not the case the breach of contract claim supplants the unjust enrichment claim.[47] Finally, Khattak argues that the tortious interference claim is time-barred by the statute of limitations and the "affiliate exception" precludes personal liability of directors of a contracting corporation for tortious interference.[48]

         GSM argues dismissal is warranted because Yu fails to state a claim generally and fails to plead the fraud claims with sufficient particularity.[49] With regard to the fraudulent inducement claim, GSM argues that Yu fails to plead any actionable false statements, GSM's knowledge of the misconduct, its intent to induce Yu's action, and Yu's reliance on the misrepresentations.[50] GSM also asserts that because the fraudulent inducement claim is impermissibly bootstrapped to, and shares identically pled damages with, Yu's breach of contract claim - it cannot survive.[51] Second, GSM maintains that the fraudulent transfer claim against it fails under the particularity pleading standard.[52] With regard to Yu's unjust enrichment claim, GSM maintains it must be dismissed because a contract governs the relationship between GSM and Yu, and the appropriate recovery is based in law.[53] US Mobile Inc. argues that it should be dismissed because it was merged into U.S. Mobile LLC and, therefore, "any surviving claims [against U.S. Mobile Inc.] would remain against U.S. Mobile LLC."[54]

         US Mobile LLC argues that it should be dismissed because neither the fraudulent transfer claim, unjust enrichment claim, nor tortious interference claim state a claim against U.S. Mobile LLC. U.S. Mobile LLC maintains that Yu's fraudulent transfer claim fails to allege the purported transfers were related to GSM's insolvency, and fails to allege any assets were transferred from GSM to U.S. Mobile LLC.[55] U.S. Mobile LLC also maintains that the unjust enrichment claim is unable to survive its Motion because the Amended Complaint lacks allegations of a relationship between Yu and U.S. Mobile LLC.[56] Finally, U.S. Mobile LLC contends that Yu's tortious interference claim against it should be dismissed because it is based entirely on conclusory allegations.[57]

         IV. STANDARD OF REVIEW

         On a motion to dismiss for failure to state a claim upon which relief can be granted, [58] the Court must read the complaint generously, accept all well-pled allegations contained therein as true, and draw all reasonable inferences in the light most favorable to the non-moving party.[59] A complaint is well-pled if it puts the opposing party on notice of the claim being brought against it.[60] "Dismissal is inappropriate unless the 'plaintiff would not be entitled to recover under any reasonably conceivable set of circumstances susceptible of proof.'"[61] Allegations that are merely conclusory and lacking factual basis will not survive a motion to dismiss.[62]

         A plaintiff alleging actual fraud must plead the circumstances constituting the fraud with particularity.[63] The underlying purpose of Rule 9(b) is to ensure that a defendant is put on sufficient notice so that it may defend itself against a plaintiffs allegations.[64] To satisfy this purpose, it is usually necessary to allege "the time, place and contents of the false representations, " while "[m]alice, intent knowledge, and other condition of mind of a person may be averred generally."[65]

         However, the "particularity requirement must be applied in light of the facts of the case and less particularity is required when the facts lie more in the knowledge of the opposing party than of the pleading party."[66]

         When, prior to discovery, a non-resident defendant challenges personal jurisdiction under Superior Court Civil Rule 12(b)(2), the plaintiff bears the burden of establishing a prima facie case that the Court has personal jurisdiction over the non-resident defendant, and "the record is construed in the light most favorable to the plaintiff."[67] A prima facie case requires the "production of enough evidence to allow the fact-trier to infer the fact at issue and rule in the party's favor."[68] In the case of a non-resident defendant, Delaware courts apply a two-step personal jurisdiction analysis. First, the Court assesses whether there is a statutory basis for personal jurisdiction.[69] Second, the Court determines whether the exercise of personal jurisdiction over the non-resident defendant comports with the Due Process Clause of the Fourteenth Amendment to the United States Constitution (the "minimum contacts" requirement).[70] In assessing whether this Court can exercise personal jurisdiction in a motion to dismiss under Superior Court Civil Rule 12(b)(2), the burden of establishing a defendant's amenability to suit is not merely restricted to the allegations contained in the complaint.[71] Rather, extra-pleading material may be used to supplement the complaint and establish jurisdiction.[72] All allegations of fact concerning personal jurisdiction are presumed true unless contradicted by affidavit.[73]

         V. DISCUSSION

         A. U.S. Mobile Inc. is Improperly Named as a Defendant Because it No Longer Exists

         Yu alleges U.S. Mobile Inc. was merged into U.S. Mobile LLC.[74] Defendant U.S. Mobile Inc. argues it should be dismissed because as a result of that merger, it no longer exists as a corporate entity separate from U.S. Mobile LLC.[75] Yu agrees that U.S. Mobile Inc. no longer exists separate from U.S. Mobile LLC, but argues that U.S. Mobile Inc. should not be dismissed because he "has a right to understand and discover the details behind" the merger.[76]

         Mergers of corporations into limited liability companies are governed by 8 Del. C. § 264. Pursuant to 8 Del. C. § 259, which is incorporated in § 264(e), [77] the entity that merges into the surviving entity must cease to exist.[78] Where a corporation is dissolved by an absolute repeal of its charter or by any other legal mode, it no longer exists for any purpose, unless there is some statutory provision continuing its existence, and it cannot sue or be sued.[79]

         US Mobile Inc. was merged into U.S. Mobile LLC, the surviving entity, on July 1, 2015.[80] Because U.S. Mobile Inc. did not survive the merger, its liabilities are attached to U.S. Mobile LLC (hereinafter, "US Mobile").[81] U.S. Mobile Inc.'s Motion to Dismiss is GRANTED.

         B. Personal Jurisdiction Over Khattak

         Yu argues the Court has personal jurisdiction over Khattak because he is the alter ego of GSM and U.S. Mobile, [82] transacts and solicits business in Delaware, [83]was a director of U.S. Mobile Inc., [84] and manages GSM, which was involved in a fraudulent scheme.[85] Khattak argues he cannot be subject to jurisdiction in Delaware for liability on contracts he never negotiated and did not sign, and exercising jurisdiction over him would not comport with due process.[86]

         1. Alter Ego Theory of Jurisdiction

         The Amended Complaint asserts Khattak is subject to personal liability under an alter ego or veil piercing theory, which is an equitable claim.[87] The alter ego theory of jurisdiction is based on the premise that the contacts of a Delaware entity may be attributed to another person if the Delaware entity is the mere alter ego of such other person.[88] The theory permits courts to ignore corporate boundaries where fraud or inequity in the use of the corporate form is found.[89]This practice is termed "piercing the corporate veil." Because the Delaware Court of Chancery has sole subject matter jurisdiction over actions to "pierce the corporate veil, "[90] this Court cannot properly exercise personal jurisdiction over Khattak under an alter ego theory.[91]

         2. 10 Del C. § 3104, Delaware Long-Arm Statute

Yu contends that personal jurisdiction over Khattak is proper under the Delaware long-arm statute, 10 Del. C. § 3104, because Khattak formed U.S. Mobile for the purpose of fraudulently transferring assets from GSM to an entity that did not owe a debt to Yu.[92] The long-arm statute contemplates any non-resident who commits certain acts or causes certain injuries in Delaware is subject to Delaware's jurisdiction.[93] The long-arm statute states, in pertinent part:
(c)...a [Delaware] court may exercise personal jurisdiction over any nonresident...who in person or through an agent:
(1) Transacts any business of performs any character of work or service in the State....[94]

         "In order for this Court to exercise jurisdiction under 10 Del. C. § 3104(c)(1), 'some act must actually occur in Delaware.'"[95] Mere ownership of stock in a Delaware corporation is insufficient to establish jurisdiction over a majority shareholder.[96] However, an act of incorporation is sufficient to confer personal jurisdiction under 10 Del. C. § 3104(c)(1) if incorporation was for the purpose of executing an agreement central to the litigation and there are significant contacts between the defendant, the State of Delaware, and the litigation.[97]

         Papendick, an in rem action involving the attachment of a parent-foreign corporation's stock interest in a wholly owned Delaware subsidiary, [98] included a claim for breach of contract.[99] The parent-foreign corporation had formed a Delaware subsidiary for the purpose of executing a contract that was allegedly breached.[100] The Delaware Supreme Court concluded that the parent-foreign corporation, by forming a Delaware subsidiary for the purpose of implementing a contract, implicitly consented to personal jurisdiction in an action brought against it and its Delaware subsidiary for breach of that contract.[101] As noted by the Delaware Supreme Court in Papendick, "[t]he decision of the foreign-parent corporation to maintain a direct and continuing connection between Delaware and itself, as the owner of a Delaware subsidiary, was found to be a 'minimum contact' of paramount importance in the specific jurisdictional analysis of Papendick..."[102]Yu does not allege that Khattak signed the Loan Agreements in Delaware, participated in negotiations in Delaware, or organized U.S. Mobile to implement a transaction between the parties (e.g., to use the entity as a vehicle to execute the Loan Agreements).[103] Had the well-pled facts alleged that Khattak formed U.S. Mobile LLC for the purpose of accepting Yu's loan money directly and developing an MVNO, personal jurisdiction over Khattak under Delaware's long-arm statute might exist.[104] Because these facts are not pled, however, 10 Del. C. § 3104(c)(1) does not authorize service on Khattak. 10 Del. C. § 3104(c)(4) addresses a situation in which a defendant is generally affiliated with the forum jurisdiction.[105] That is, 10 Del. C. § 3104(c)(4) is applicable when a defendant has contacts with this State that are so extensive and continuing that it is fair and consistent with State policy to require that he appear here and defend a claim, even when that claim arose outside of this State and caused injury outside of this State.[106] Based on the facts as pled, Khattak's minimal contacts with Delaware are insufficient to allow service under 10 Del. C. § 3104(c)(4). Yu fails to allege facts establishing Khattak engaged in a "persistent course of conduct in the State, " or that Khattak "derives substantial revenue from services, or things used or consumed in the State."[107] As Khattak correctly notes, mere formation of a Delaware entity is not sufficient to establish general jurisdiction under 10 Del. C. § 3104(c)(4).[108]

         Based on the facts as pled, there is no basis to authorize service upon Khattak under 10 Del. C. § 3104. 3. 10 Del. C § 3114, Implied Consent Statute for Non-Resident Directors of Delaware Corporations

         Yu also asserts the Court has personal jurisdiction over Khattak pursuant to 10 Del. C. § 3114, which provides for the service of process on non-resident directors:

in all civil actions or proceedings brought in this State, by or on behalf of, or against such corporation, in which such director, trustee or member is a necessary or proper party, or in any action or proceeding against such director, trustee or member for violation of a duty in such capacity....[109]

         The Court has exercised personal jurisdiction over a non-resident director under 10 Del. C. § 3114 when the non-resident director "used his position as director of a Delaware corporation to commit fraud, " making him a necessary or proper party.[110] Khattak notes that Yu has not alleged any misconduct by Khattak in his capacity as a director of U.S. Mobile Inc.[111] In response, Yu argues that Khattak "availed himself of certain duties under Delaware law because he formed and acted as a director and officer of.. .US Mobile (all entities), " and therefore Yu is entitled to discovery on the U.S. Mobile Inc./US Mobile LLC merger.[112] At this stage, it is the well-pled allegations in the Amended Complaint on which the Court must focus, and Yu alleges GSM and Khattak transferred resources and assets for inadequate exchange, [113] and U.S. Mobile was a transferee, through and separate from Khattak.[114] Under the facts as pled, service is not authorized on Khattak under 10 Del. C. §3114. 4. 6 Del. C. § 18-109, Implied Consent Statute for Non-Resident Managers of Delaware Limited Liability Companies

         Finally, Yu asserts that personal jurisdiction over Khattak is proper under 6 Del. C. § 18-109(a) because Khattak is a manager of GSM and U.S. Mobile.[115]Because jurisdictional discovery has not been completed, the Court gives Yu the benefit of the doubt and holds him to the lower burden of establishing a prima facie case for this Court's exercise of jurisdiction over Khattak.[116]

         The Court looks to instructive Delaware Supreme Court cases addressing the exercise of personal jurisdiction over non-resident directors of Delaware corporations in non-breach of fiduciary duty claims, such as fraud claims that are sufficiently related to and "predicated on the same nucleus of facts" as a fiduciary duty claim.[117] In Tsang Mun Ting v. Silver Dragon Resources, Inc., the Court found personal jurisdiction over a non-resident director with no State contacts because he was "a necessary or proper party" to the action.[118] The Court held there must "be a close nexus between the claims involving the corporation which made it a party to the suit, and the conduct of the non-resident fiduciary."[119] Thus, "only claims that involve conduct by the non-resident fiduciary using his corporate power will make him a necessary or proper party."[120] Although no fiduciary duty claims were alleged, this Court held, and the Delaware Supreme Court affirmed, that jurisdiction over the non-resident director was proper under 10 Del. C. § 3114 because it was clear to the Court that the alleged misconduct would be adverse to the non-resident director's fiduciary duties.[121]

         The Court's decision in Tsang Mun Ting makes clear the breadth of 10 Del. C. § 3114. There, a group of investors negotiated to acquire operating control of Silver Dragon Resources, Inc. ("Silver Dragon") by appointing a new slate of directors in exchange for making loans to Silver Dragon totaling over three million dollars.[122] One of the creditors, Tsang Mun Ting ("Ting"), made a wire transfer to Silver Dragon in the amount of $1, 014, 140 in reliance upon representations that the executed documents would be delivered the following day.[123] The deal was never completed because one of Silver Dragon's existing directors refused to execute the agreement, and thereafter the defendants refused to return Ting's loan.[124] Accordingly, Ting brought suit against Hazout, a Canadian resident who was a director and officer of Silver Dragon, and others, for unjust enrichment, fraud, and fraudulent transfer.[125] Hazout moved to dismiss the complaint against him, arguing that 10 Del. C. § 3114 did not permit jurisdiction over him because the complaint did not allege a breach of fiduciary duty.[126] Ting alleged that Hazout acted in his corporate capacity as a Silver Dragon director and officer to commit fraud by transferring approximately $750, 000 of Ting's Silver Dragon loan to a creditor of Silver Dragon that Hazout owned.[127] The Court held, "[i]f proven, that conduct would be in contradiction to [Hazout's] obligations as a director of a Delaware corporation and traditional notions of justice and fair play require the Court to hold Hazout accountable for misusing his position."[128]

         a. Statutory Basis to Authorize Service

         Section 18-109(a) is an implied consent statute applicable only to a manager of a limited liability company, which is defined as either a manager fixed under the operative limited liability company agreement or a "person who participates materially in the management of the limited liability company."[129] 6 Del. C. § 18- 109(a) states, in pertinent part:

A manager...of a limited liability company may be served with process...in all civil actions...brought in the State of Delaware involving or relating to the business of the limited liability company or a violation by the manager...of a duty to the limited liability company.. .whether or not the manager... is a manager... at the time suit is commenced. A manager's...serving as such constitutes such person's consent to the appointment of the registered agent of the limited liability company...as such person's agent upon whom service of process may be made as provided in this section. Such service as a manager...shall signify the consent of such manager.. .that any process when so served shall be of the same legal force and validity as if served upon such manager.. .within the State of Delaware and such appointment of the registered agent...shall be irrevocable.[130]

         An action "involves or relates to the business of a limited liability company" if:

(1) the allegations against [the manager] focus centrally on his "rights, duties and obligations" as a manager of a Delaware limited liability company;
(2) the resolution of this matter is "inextricably bound up in Delaware law;" and
(3) Delaware has a strong interest in providing a forum for disputes relating to the ability of managers of a limited liability company formed under its law to properly discharge their respective managerial functions.[131]

         First, the claims at issue focus on Khattak's rights, duties, and obligations as manager of GSM. The claims arise from Khattak allegedly misusing his position as manager of GSM to commit fraudulent transfers by moving Yu's GSM loan money to an entity incorporated and controlled by Khattak.[132] If proven, such conduct would be in contradiction to Khattak's obligations as manager of GSM, a Delaware limited liability company.[133]

         Second, the resolution of this matter is inextricably bound up in Delaware law. The alleged fraudulent transfers were facilitated through the formation, conversion, and merger of several Delaware entities.[134] The question of whether GSM's assets were wrongfully transferred will be determined by Delaware law.[135]

         Third, Delaware has a strong interest in providing a forum for the resolution of disputes regarding the internal affairs of limited liability companies formed under its laws.[136] The wrongs Yu alleges are not tort or contract claims unrelated to the internal affairs of a Delaware limited liability company; rather, these claims involve the alleged misuse of Khattak's position as a manager of a Delaware limited liability company to commit fraud.

         Construing the well-pled allegations in the Amended Complaint in the light most favorable to the Plaintiff, Yu has established aprimafacie case that: (1) the allegations against Khattak, a non-resident defendant-manager, focus centrally on Khattak's rights, duties, and obligations as a manager of a Delaware limited liability company; (2) the resolution of the matter is inextricably bound up in Delaware law; and (3) Delaware has a strong interest in providing a forum for the resolution of the dispute.[137] Thus, the suit involves or relates to the business of GSM, a necessary predicate to jurisdiction under 6 Del. C. § 18-109. In light of the General Assembly's decision to write 6 Del. C. § 18-109 more broadly than 10 Del. C. § 3114, [138] this conclusion is consistent with the Delaware Supreme Court's exercise of personal jurisdiction over non-resident directors of Delaware corporations in non-breach of fiduciary duty claims.[139] Therefore, the Court concludes that service of process is authorized under 6 Del. C. § 18-109(a).

         b. Due Process

         Having determined that service is statutorily authorized, the Court must next determine whether exercising personal jurisdiction over Khattak is consistent with the Due Process Clause of the Fourteenth Amendment to the United States Constitution.[140] "The constitutional standard for determining whether a state may exercise judicial power over a person is fairness and substantial justice."[141]International Shoe, World-Wide Volkswagen, and their progeny require a specific judgment in balancing the interests of the incorporating state and the fairness to the defendant under all of the particular circumstances.[142] Central to the particularized inquiry into the fairness of asserting jurisdiction are the "purposive actions of the would-be defendant and the reasonable expectation of one in his position."[143] The Court must determine whether it should have been reasonably anticipated by such a person that his actions might result in the forum state asserting personal jurisdiction over him to adjudicate disputes arising from those actions.[144] The purposeful acts of the defendant are the focus of attention, but those acts need not occur within the jurisdiction, so long as they create some substantial relationship with the forum jurisdiction.[145] When a person purposefully acts to create a relationship, "even of some minimal kind, with the forum state, then 'the forum state's interest in adjudicating the dispute' should be given weight in determining if [] exercise of jurisdiction would comport with fundamental notions of fair play and substantial justice."[146]

         Delaware can compel the appearance of directors and managers to litigate claims other than claims for breach of their fiduciary duties.[147] By purposefully availing oneself of the privilege of becoming a manager of a Delaware limited liability company, a manager accepts significant benefits and protections under the laws of this State.[148] As such, requiring managers to impliedly consent to the assertion of Delaware in personam jurisdiction in actions "predicated on the same nucleus of facts" as a fiduciary duty claim is not unreasonable so long as the consent requirement serves a legitimate State purpose.[149]

         A "realistic evaluation of the relationship" Khattak has established with Delaware requires the conclusion that it is in keeping with traditional notions of fair play and substantial justice to require him to defend these claims in this jurisdiction.[150] There is no dispute that Khattak was GSM's chief executive officer, original founder, manager, and 85% owner at the time of the alleged misconduct.[151] In assuming his position as a manager of a Delaware limited liability company (GSM), Khattak accepted certain duties under Delaware law, and this State has a public interest in enforcing those duties. The State is "obliged to govern the exercise of that power insofar as the issues of corporate power and fiduciary obligation are concerned."[152]

         Akin to the creditor-plaintiff in Tsang Mun Ting, Yu does not allege a fiduciary duty claim against Khattak, he brings claims of fraudulent inducement, fraudulent transfer, unjust enrichment, and tortious interference.[153] Yu alleges that through his position as manager of GSM, Khattak fraudulently transferred Yu's GSM loan money to an entity incorporated and controlled by Khattak in an effort to defraud Yu.[154] If proven, such conduct would be in contradiction to Khattak's obligations as a manager of a Delaware limited liability company and traditional notions of justice and fair play require the Court to hold Khattak accountable for misusing his position.[155] Khattak should not be surprised that he has been haled into a Delaware court when disputes have arisen over matters so inherently intertwined with his fiduciary position - he impliedly consented to just that.[156]Therefore, the Court concludes that requiring Khattak to defend his alleged actions in this Court constitutes no offense to traditional notions of fairness and, therefore, personal jurisdiction over Khattak for the fraudulent transfer claim is proper under 6Del.C. § 18-109(a).[157]

         Once a defendant is subject to personal jurisdiction under 6 Del. C. § 18-109(a) as to certain claims, the Court may exercise personal jurisdiction over the defendant with respect to any claims that are sufficiently related to the cause of action.[158] Sufficiently related claims are those predicated on the same set of facts.[159] All of the counts in the Amended Complaint arise out of a common nucleus of operative fact and challenge alleged acts carried out by Khattak in his managerial capacity. The Court has personal jurisdiction over Khattak under 6 Del. C. §18-109(a) for purposes of Count III, the fraudulent transfer claim, and thus, the Court also has personal jurisdiction over Khattak for purposes of the fraudulent inducement, unjust enrichment, and tortious interference claims against him. Khattak's Motion to Dismiss Counts II, III, IV, and V for lack of personal jurisdiction is therefore DENIED.

         C. Fraudulent Inducement Claim Against Khattak

         Yu alleges that Khattak knowingly, or with reckless indifference to the truth, misrepresented to Yu that GSM would use Yu's loan funds to develop an MVNO with GSM as the MVNO, and Yu relied on such representations in loaning GSM money.[160] In order to survive a motion to dismiss a fraud claim, a plaintiff must allege that: (1) defendant falsely represented a material fact or omitted facts that the defendant has a duty to disclose; (2) defendant knew that the representation was false or made with a reckless indifference to the truth; (3) defendant intended to induce plaintiff to act or refrain from action; (4) plaintiff acted in justifiable reliance on the representation; and (5) plaintiff was injured by its reliance on defendant's representation.[161] Khattak argues that because "Yu identifies zero representations that came from Khattak, " Yu's fraudulent inducement claim should be dismissed for failing to meet the particularity standard under Superior Court Civil Rule 9(b).[162]

         A claim of fraudulent inducement is subject to the heightened pleading requirement of Superior Court Civil Rule 9(b).[163] Yu does not allege that he ever met or spoke directly with Khattak. Khattak did not approach Yu to solicit the loans to GSM; rather, Shams was Yu's initial point of contact.[164] The Amended Complaint is devoid of allegations of misrepresentations made directly by Khattak to Yu.[165] The Amended Complaint fails to identify any particular misrepresentation from Khattak.[166] Yu has not pled with particularity the detail required to state a fraudulent inducement claim against Khattak.[167]

         In Abbott Laboratories v. Owens, [168] the Court found that the plaintiffs fraudulent inducement claim failed to set forth sufficient allegations that the defendant officers actively participated in the tortious act. The Court held that under the personal participation doctrine, [169] individual liability attaches only where an officer "directed, ordered, ratified, approved, or consented to" the tortious act in question.[170] Yu alleges GSM and Shams made representations to Yu on Khattak's behalf or at Khattak's direction.[171] There are no factual allegations supporting this, and there are no specific allegations of what these misrepresentations were, when they were made, or why they are attributable to Khattak.[172] The Court does not accept conclusory allegations that lack factual support.[173] Yu's fraudulent inducement claim against Khattak falls far short of the Rule 9(b) standard. Yu fails to adequately allege that Khattak falsely misrepresented a material fact or omitted facts that he had a duty to disclose. Consequently, Khattak's Motion to Dismiss the fraudulent inducement claim against him is GRANTED.

         D. Fraudulent Transfer Claim Against Khattak

         Yu alleges Khattak violated the Delaware Uniform Fraudulent Transfers Act ("DUFTA").[174] According to Yu, "with actual intent to hinder, delay, or defraud its creditors, " Khattak caused GSM to transfer resources and assets to U.S. Mobile without a fair exchange of value and with at least constructive knowledge that GSM had no way of fulfilling its obligations to creditors (particularly Yu) in due course.[175] Yu further alleges Khattak as co-founder, controller, and 85% owner of GSM, [176] "transferred cash and assets of GSM, "[177] and that GSM and U.S. Mobile were acting "through its director and officer Khattak."[178] Khattak argues there is no aiding and abetting liability for directors, and challenges the factual bases for the allegations regarding GSM's insolvency, fair exchange, and other elements necessary for Yu to prevail, including the requirement to plead with sufficient particularity.[179]

         To establish a fraudulent transfer claim, a plaintiff must show either "actual intent to hinder, delay or defraud any creditor" or inadequate value received for a transfer, combined with either insufficient assets for business or at least constructive belief that the transferor would incur debts exceeding its ability to repay them as they come due.[180] Only the transferor and transferee may be liable under DUFTA; there is no aiding and abetting liability for directors.[181] It is not enough to make conclusory allegations mirroring the elements in the fraudulent transfer statute.[182]

         Yu's DUFTA claim against Khattak reads like an attempt to pierce the corporate veil.[183] Recognizing that this is an equitable claim over which this Court has no jurisdiction, [184] Yu alleges (without any factual support) that "Khattak benefitted from those transfers" and "made transfers by himself in his individual capacity."[185] Yu pleads no facts to support his allegation that Khattak was a transferee, and prosecuting him as a transferor would require the Court to improperly pierce the corporate veil.[186] Khattak's Motion to Dismiss the fraudulent transfer claim against him is therefore GRANTED.

         E. Unjust Enrichment Claims Against Khattak and U.S. Mobile

         Yu alleges he gave GSM loan money pursuant to the Loan Agreements, GSM transferred the loan money and GSM resources to Khattak and U.S. Mobile, and U.S. Mobile wrongfully retained the loan money and GSM resources.[187] Yu alleges that Khattak and U.S. Mobile have been unjustly enriched by their access to the loan money.[188] According to Yu, Khattak was unjustly enriched when he used Yu's loan to pay himself and relatives and fund his "lavish lifestyle, "[189] and U.S. Mobile was unjustly enriched because it was Yu's loan money, transferred from GSM, that funded U.S. Mobile's launch, first year expenses, and payroll.[190]

         Khattak argues that Yu has failed to state a claim for unjust enrichment as a matter of law because a contractual relationship governs the transactions, including the matters upon which the unjust enrichment claim is based.[191] U.S. Mobile argues any transfer to U.S. Mobile from GSM was GSM's money, and Yu must look to the party he contracted with for repayment of the loans, not U.S. Mobile.[192]

         Delaware courts define unjust enrichment as "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."[193] To state a claim for unjust enrichment, the complaint must allege sufficient facts to show: (1) an enrichment; (2) an impoverishment; (3) a relation between the enrichment and impoverishment; (4) the absence of justification; and (5) the absence of a remedy provided by law.[194]

         Accepting all well-pled allegations as true, Yu's unjust enrichment claim against Khattak and U.S. Mobile fails for lack of a relationship between their enrichment and Yu's impoverishment.[195] Yu alleges Khattak and U.S. Mobile unjustly benefitted from the loans he made to GSM. Those loans are governed by the Loan Agreements. This claim is not independent from the breach of contract claim.[196]

         In an attempt to avoid dismissal of his unjust enrichment claim, Yu, as a creditor of GSM, alleges what the Court interprets as an alter ego theory claim[197]and a derivative claim, [198] both of which the Court lacks jurisdiction to adjudicate.[199] Khattak's and U.S. Mobile's Motions to Dismiss the unjust enrichment claims against them are therefore GRANTED.

         F. Tortious Interference Claim Against Khattak

         Yu alleges Khattak tortiuously interfered with Yu's contractual interests under the Loan Agreements with GSM.[200] Yu avers he had an existing contractual relationship with GSM, Khattak and U.S. Mobile had knowledge of that relationship, and they intentionally caused GSM to breach the Loan Agreements.[201]Khattak maintains that the tortious interference claim must be dismissed because it was filed beyond the three-year statute of limitations under 10 Del. C. § 8106, and because there is no personal liability for inducing a breach of contract by GSM when acting within his role.[202]

         To establish a claim for tortious interference under Delaware law, a plaintiff must show that there was: (1) a contract; (2) about which defendants knew; and (3) an intentional and improper act that is a significant factor in causing the breach of such contract (4) without justification (5) which causes injury.[203]

         It is well settled that a party to a contract cannot be held liable for both breach of that contract and for inducing that breach.[204] This is the so-called "affiliate exception." To state a claim for tortious interference, a complaint must contain factual allegations that support a reasonable inference that the defendant was "a stranger to both the contract and the business relationship giving rise to and underpinning the contract."[205] If the defendant was not a stranger to the contract and business relationship, the plaintiff must adequately plead that the affiliate was not pursuing legitimate profit-seeking activities of the affiliated enterprise in good faith, or was "motivated by some malicious or other bad faith purpose to injure the plaintiff."[206]

          According to the allegations in the Amended Complaint, Khattak controlled GSM and U.S. Mobile.[207] Given his role as owner and manager of GSM, as long as Khattak was acting within the scope of his authority, he cannot be liable for tortious interference with contract.[208] The Court must determine whether Yu has alleged facts to rebut the presumption that Khattak was acting with the same legitimate economic interests as GSM, and instead acted in bad faith to injure Yu.[209]

         Yu's Amended Complaint does not include specific facts that could support his allegations of bad faith and overcome the qualified affiliate exception. Yu alleges no non-conclusory allegations that Khattak shifted GSM's assets such that GSM was insolvent and could not satisfy its obligations to Yu.[210] Yu's allegations do not offer facts permitting the inference of egregious conduct or malice necessary to sustain a bad faith claim that can overcome the affiliate exception. The Amended Complaint repeats the elements of tortious interference, and alleges Khattak stripped GSM of its assets and formed U.S. Mobile, [211] U.S. Mobile's launch in 2014 caused GSM's breach in 2016, [212] and Khattak transferred GSM's cash to U.S. Mobile in January 2016.[213] It does not include well-pled allegations that Khattak caused GSM to transfer specific assets to U.S. Mobile, [214] nor does it allege GSM made unusual payments to Khattak or U.S. Mobile.[215] Yu fails to allege the requisite level of bad faith or malice needed to plead a claim for tortious interference against Khattak and, therefore, Khattak's Motion to Dismiss the tortious interference claim against him is GRANTED.

         G. Fraudulent Inducement Claim Against GSM

         GSM argues that Yu's fraudulent inducement claim fails to plead separate damages from his breach of contract claim and impermissibly bootstraps the fraud claim to the breach of contract claim.[216] "Delaware courts have consistently held that to successfully plead a fraud claim, the allegedly defrauded plaintiff must have sustained damages as a result of a defendant's action."[217] Fraud damages allegations cannot simply "rehash" the damages that were allegedly caused by the claimed breach of contract.[218] Failure to plead separate damages is an independent ground for dismissal.[219]

         Yu's alleged damages for his fraud claim and his breach of contract are almost identical. The prayer for relief in Yu's breach of contract claim requests judgment "in an amount to be determined, but not less than $3, 605, 000, plus costs interest and grant all further relief as may be just and appropriate."[220] The prayer for relief for Yu's fraudulent inducement claim requests judgment "in an amount to be determined, but not less than $3, 605, 000, plus costs, punitive damages, interest and any and all such other and further relief as may be just and appropriate."[221]Yu's addition of punitive damages to his fraudulent inducement prayer for relief cannot change the fact that his fraud claim is premised on an alleged breach of the Loan Agreements.[222] Yu has failed to plead fraud damages separate and apart from his breach of contract damages.

         Leave to Amend to Add Rescissory Damages

         In an attempt to salvage his fraudulent inducement claim, Yu requests leave to amend under Superior Court Civil Rule 15 to include rescissory damages in the prayer for relief attached to his fraudulent inducement.[223] GSM opposes, noting that "Yu has had four chances to review the case law and to ensure his pleading complies" with the particularity pleading requirement.[224]

         A motion for leave to amend is within the sound discretion of the Court and leave "shall be freely given when justice so requires."[225] A motion to amend must be denied if the amendment would be futile in the sense that it would not survive a motion to dismiss under Rule 12(b)(6).[226] The standard for assessing the legal sufficiency of a proposed amended complaint is the same standard applicable to a motion to dismiss under Rule 12(b)(6)[227] - all allegations in the amended complaint must be accepted as true, [228] and the proposed amendment will not be dismissed unless the plaintiff would not be entitled to recover under any reasonably conceivable set of circumstances susceptible of proof.[229] If there is no set of facts which could be proved under the amendment which would constitute a valid and sufficient claim or defense, leave should be denied.[230] Therefore, the Court must determine whether amending the fraudulent inducement claim to include rescissory damages constitutes a valid and sufficient claim.

         As noted above, to state a claim for fraudulent inducement a plaintiff must plead that he was injured by his reliance on the defendant's misrepresentation.[231]The traditional measure of damages is an award of compensatory damages -damages to compensate a plaintiff for his proven, actual loss caused by the defendant's wrongful conduct.[232] Compensatory damages are measured by the plaintiffs out-of-pocket, actual loss.[233]

         Rescissory damages are an exception to the normal out-of-pocket measure because they are measured at a point in time after the transaction.[234] Delaware courts award rescissory damages when equitable rescission of a transaction would be appropriate, but not feasible.[235] "At the most general level, this remedy is premised upon the idea that: (1) the transaction whereby the party gave up an asset was wrongful in some way, and (2) the nature of the wrong perpetuated is such that plaintiff is entitled to more than his 'out-of-pocket' harm, as measured by the market value of the asset at or around the time of the wrong."[236] Where rescission calls for the cancellation of the bargain and the return of the parties to the status quo, rescissory damages are the equivalent value of stock or property at the time of resale or at the time of judgment.[237] The remedy is generally available for an adjudicated breach of the duty of loyalty, such as cases involving self-dealing or where a fiduciary puts personal interests ahead of the interests of its beneficiary.[238]

         Yu does not plead that he was fraudulently induced to exchange property (e.g., stock or other assets) of appreciating value that GSM subsequently disposed of;[239] nor is it reasonable to infer from the allegations that rescissory damages should be awarded because rescission is appropriate, but not feasible.[240] As a matter of law, rescissory damages are not a proper remedy given the pled facts.[241]Amending the Amended Complaint to include rescissory damages for fraudulent inducement would be futile. Consequently, Yu's request for leave to amend is denied, and GSM's Motion to Dismiss the fraudulent inducement claim against it is GRANTED.

         H. Fraudulent Transfer Claims Against GSM and U.S. Mobile

         US Mobile submitted invoices for mobile phone orders (with its Opening Brief) to support its argument that no fraudulent transfer occurred.[242] Yu argues that U.S. Mobile asserted "a meritorious defense" when it submitted the phone invoices, and therefore converted the motion to dismiss the fraudulent transfer claim against it to a motion for summary judgment.[243]

         The general rule is that matters outside the pleadings should not be considered on a Rule 12(b)(6) motion to dismiss.[244] There are two exceptions to the rule: (1) where an extrinsic document (or set of documents) is integral to a plaintiffs claim and is incorporated into the complaint by reference; and (2) where the document (or set of documents) is not being relied upon to prove the truth of its contents.[245] Neither exception applies here, [246] and therefore Superior Court Civil Rule 12(b)(6) prohibits the Court's consideration of the invoices. Consequently, the Court will not convert the Motion to Dismiss the fraudulent transfer claim against U.S. Mobile into a motion for summary judgment.

         Yu alleges that GSM and U.S. Mobile violated DUFTA. According to Yu, "with actual intent to hinder, delay, or defraud its creditors, " GSM transferred resources and assets to U.S. Mobile without a fair exchange of value and with at least constructive knowledge that GSM had no way of fulfilling its obligations to creditors (particularly Yu) in due course.[247] GSM and U.S. Mobile challenge the factual bases for the allegations regarding GSM's insolvency, fair exchange, and other elements necessary for Yu to prevail, including the requirement to plead with sufficient particularity under Rule 9(b).[248]

         To establish a fraudulent transfer claim, a plaintiff must show either "actual intent to hinder, delay or defraud any creditor" or inadequate value received for a transfer, combined with either insufficient assets for business or at least constructive belief that the transferor would incur debts exceeding its ability to repay them as they come due.[249] Although Delaware is a notice pleading jurisdiction, Superior Court Civil Rule 9(b) requires a plaintiff to plead actual fraud with particularity.[250] "Rule 9(b) does not require an exhaustive cataloguing of facts but on sufficient factual specificity to provide assurance that the plaintiff has investigated [...] the alleged fraud and reasonably believes that a wrong has occurred."[251] However, it is not enough to make conclusory allegations mirroring the elements in the fraudulent transfer statute.[252]

          With regard to GSM and U.S. Mobile as transferor and transferee, respectively, accepting all well-pled allegations as true, and viewing the facts in the light most favorable to the non-movant, Yu alleges a reasonably conceivable set of circumstances from which it could be inferred GSM transferred its cash and assets with an actual intent to defraud Yu. While an actual fraud claim must meet a heightened pleading standard requiring particularized facts, [253] "[c]ourts must be sensitive to the fact that application of Rule 9(b) prior to discovery 'may permit sophisticated defrauders to successfully conceal the details of their fraud.'"[254] The "particularity requirement must be applied in light of the facts of the case and less particularity is required when the facts lie more in the knowledge of the opposing party than of the pleading party."[255]

         In Snyder v. Butcher & Co., defendants filed a motion to dismiss predicated on plaintiffs' alleged failure to plead fraud with particularity, even though the plaintiffs had identified: (1) the promotional materials they relied upon in deciding to invest in privately-owned radio stations; (2) the alleged misrepresentations contained in those promotional materials; and (3) the parties who prepared and distributed the promotional materials.[256] There, the Court permitted the fraud claim to survive the motion to dismiss, holding:

The three purposes of Rule 9(b) have been fulfilled. First, Defendants are informed of the act Plaintiff complains of and may adequately prepare for response and defense. Second, the Amended Complaint does not seem to be a pretext for a fishing expedition, but contains allegations of a substantial suit. Third, Defendants are being exposed to a suit which, while it may not ultimately be successful, cannot correctly be characterized as unfounded.[257]

         The Snyder decision is instructive. Because the facts of a fraudulent transfer lie more in the knowledge of GSM and U.S. Mobile than of Yu, less particularity is required at this preliminary stage in the litigation.[258] The analysis of actual intent is informed by a number of factors, including whether the transfer was to an insider, the transfer was concealed, and the debtor was or became insolvent after the transfer.[259] Yu adequately alleges that: (1) Yu loaned $3, 500, 000 to GSM;[260] (2) GSM made timely interest payments until early 2016;[261] (3) Khattak formed the first U.S. Mobile entity on August 11, 2014;[262] (4) Khattak launched an MVNO within U.S. Mobile in or around September 2014, within weeks of Yu making his final loan to GSM;[263] (5) GSM transferred all or substantially all of its assets to U.S. Mobile, a limited liability company owned by GSM's controller;[264] (6) the transfers from GSM to U.S. Mobile were concealed;[265] (7) GSM funds and assets were transferred to U.S. Mobile without fair value or consideration;[266] and (8) GSM is insolvent and has advised Yu that it cannot service the loans.[267] The three purposes of Rule 9(b) are fulfilled: (1) GSM and U.S. Mobile are informed of the act Yu complains of and may adequately prepare for response and defense; (2) the Amended Complaint does not appear to be a pretext for a fishing expedition, but contains allegations of a substantial suit; and (3) GSM and U.S. Mobile are being exposed to a suit which, while it may not ultimately be successful, cannot correctly be characterized as unfounded at this juncture.

         Accepting all well-pled allegations as true, a reasonable jury could infer that GSM assets were fraudulently transferred to U.S. Mobile. A determination as to whether GSM received "reasonably equivalent value" in exchange for allegedly improper transfers requires additional discovery. Therefore, GSM's and U.S. Mobile's Motions to Dismiss the fraudulent transfer claim against them are DENIED.

         I. Unjust Enrichment Claim Against GSM

         Yu alleges he gave GSM loan money pursuant to the Loan Agreements, GSM transferred the loan money and GSM resources to U.S. Mobile and Khattak, and U.S. Mobile wrongfully retained the loan money and resources.[268] Yu alleges that GSM has been unjustly enriched by its access to the loan money and its use to cover operations, including operating expenses and payroll.[269]

         GSM argues that Yu has failed to state a claim for unjust enrichment as a matter of law because the parties have a contractual relationship governing the transaction, including the matters upon which the unjust enrichment claim is based.[270] Yu responds that he may validly plead an unjust enrichment claim in the alternative because GSM briefly challenged the validity of the Loan Agreements.[271]

          As mentioned previously, Delaware courts define unjust enrichment as "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."[272] Before reaching the elements of a challenged unjust enrichment claim, a court first must satisfy itself that no contract already governs the relevant relationship between the parties.[273] "If a contract comprehensively governs the parties' relationship, then it alone must provide the measure of the plaintiffs rights and any claim of unjust enrichment will be denied."[274] In some cases, however, both a breach of contract and an unjust enrichment claim may survive a motion to dismiss when pled as alternative theories of recovery.[275] But

          "a right to plead alternative theories does not obviate the obligation to provide factual support for each theory."[276]

         The transactions at issue - the loans Yu made to GSM and GSM's failure to service the loans - are governed by the Loan Agreements.[277] The Defendants do not dispute this.[278] Yu does not plead his unjust enrichment claim as an alternative theory to his breach of contract claim. Rather, he alleges that he conferred a benefit upon GSM, and is directly impoverished thereby, in two respects. First, Yu paid over three million dollars in loan money to GSM under the Loan Agreements, and second, "GSM was enriched with Dr. Yu's money as loaned in the Loan Agreement [and] operated based on the loan proceeds...."[279] In both instances the Loan Agreements, which were negotiated by the parties, govern the relevant rights between Yu and GSM. The factual basis for Yu's unjust enrichment claim against GSM is not independent from the factual basis of his breach of contract claim.[280]Given these pled facts, Yu is not entitled to recover for unjust enrichment under any reasonably conceivable set of circumstances susceptible of proof. Thus, GSM's Motion to Dismiss the unjust enrichment claim is GRANTED.

         J. Tortious Interference Claim Against U.S. Mobile

         Yu alleges that U.S. Mobile tortiuously interfered with Yu's contractual interests under the Loan Agreements with GSM.[281] Yu alleges he had an existing contractual relationship with GSM, U.S. Mobile had knowledge of that relationship, and it intentionally caused GSM to breach the Loan Agreements.[282] U.S. Mobile argues that Yu makes only conclusory allegations as to the elements of tortious interference against U.S. Mobile, warranting the claim's dismissal.[283] The Amended Complaint repeats the elements of tortious interference, and alleges that Khattak stripped GSM of its assets and formed U.S. Mobile, [284] U.S. Mobile's launch in 2014 caused GSM's breach in 2016, [285] and Khattak transferred GSM's cash to U.S. Mobile in January 2016.[286] Noticeably absent in the Amended Complaint is any allegation that U.S. Mobile committed an intentional act that was a significant factor in causing GSM's breach of the Loan Agreements.[287] Moreover, the Amended Complaint contains no allegations demonstrating why or how U.S. Mobile knew or should have known about the Loan Agreements. Because the Amended Complaint pleads only conclusory allegations that U.S. Mobile intentionally caused GSM to breach the Loan Agreements, U.S. Mobile's Motion to Dismiss the tortious interference claim against it is GRANTED.

         VI. CONCLUSION

         In conclusion, for the reasons explained above:

         GSM's Motion to Dismiss Counts II and IV of the Amended Complaint is GRANTED, and its Motion to Dismiss Count III of the Amended Complaint is DENIED;

         Khattak's Motion to Dismiss Counts II, III, IV, and V of the Amended Complaint is GRANTED;

         US Mobile LLC's Motion to Dismiss Counts IV and V of the Amended Complaint is GRANTED, and its Motion to Dismiss Count III ...


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