Searching over 5,500,000 cases.


searching
Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.

Inteam Associates, LLC v. Heartland Payment Systems, LLC

Supreme Court of Delaware

December 18, 2018

INTEAM ASSOCIATES, LLC and LAWRENCE GOODMAN, III, Plaintiff/Counterclaim Defendants-Below, Appellant,
v.
HEARTLAND PAYMENT SYSTEMS, LLC, Defendant/Counterclaim Plaintiff-Below, Appellee.

          Submitted: December 12, 2018

          Court Below: Court of Chancery of the State of Delaware C.A. No. 11523

          Before STRINE, Chief Justice, VALIHURA, and SEITZ, Justices.

          ORDER

          COLLINS J. SEITZ, JR. JUSTICE

         This 18th day of December, 2018, having considered the briefs and oral argument:

         (1) This appeal follows a remand to the Court of Chancery.[1] In an earlier appeal, we affirmed the Court of Chancery's decision which found that Heartland Payments Systems, LLC breached non-competition obligations with inTEAM Associates, LLC, and Lawrence Goodman III breached non-solicitation obligations with Heartland. We also affirmed the Court of Chancery's remedies for the breaches-an injunction against Heartland extending the non-compete period, and a judgment against Goodman for some of the fees paid by Heartland under the consulting agreement.[2] But, we reversed one aspect of the Court of Chancery decision and ruled that inTEAM and Goodman also violated their non-competition obligations. On remand, we instructed the Court of Chancery to consider a remedy for inTEAM's and Goodman's breaches:

We remand to the Court of Chancery for further proceedings consistent with this opinion. Because of the passage of time, we leave it to the Court of Chancery to fashion a remedy adequate to compensate Heartland for Goodman's breach of the APA and Consulting Agreement, and inTEAM's breach of the CMA.[3]

         We also allowed inTEAM and Goodman to raise affirmative defenses to their violation of non-competition obligations:

[T]o the extent that inTEAM and Goodman properly raised and briefed affirmative defenses at trial addressed to the alleged violation of the non-compete and the Court of Chancery did not reach them because it found no violation, they are free to reassert them in the course of the Court of Chancery's determination of what relief, if any, to grant for inTEAM's and Goodman's violation of the non-compete.[4]

          (2) On remand the Court of Chancery rejected inTEAM's and Goodman's affirmative defenses "because Heartland lacked knowledge of Goodman's breaching behavior."[5] But, due to what it characterized as the unclean hands of all parties, the court vacated the injunction against Heartland and refused to enter new injunctions against any of the parties. Finally, the court entered judgment against Goodman for breaching his non-competition obligations in an amount representing consulting fees he received from Heartland during the period of competition.

         (3) inTEAM and Goodman appeal from the remand order claiming that the Court of Chancery (a) exceeded the scope of the remand by vacating the injunction against Heartland affirmed by this Court and (b) improperly revisited factual findings affirmed by this Court, which led it to deny inTEAM's and Goodman's affirmative defenses.

         (4) We agree with inTEAM that the Court of Chancery exceeded the scope of our remand by vacating the injunction against Heartland. In the earlier appeal this Court reversed the Court of Chancery on a limited issue-inTEAM and Goodman's breach of their non-competition obligations. We affirmed all other issues raised in the appeal, including the Court of Chancery's ruling that Heartland breached its noncompetition obligations and the injunction entered against Heartland. The remand was limited to deciding "what relief, if any, to grant for inTEAM's and Goodman's violation of the non-compete."[6] Those rulings were binding on the Court of Chancery, and not subject to being re-litigated on remand.[7] Thus, the Court of Chancery erred by vacating the injunction against Heartland.

         (5) What to do about the Court of Chancery's error is less certain. The injunction expired on March 21, 2018-eight days before the Court of Chancery vacated the injunction on March 29, 2018. Thus, reinstating the injunction would be unnecessary except for one intervening event-inTEAM's rule to show cause why Heartland should not be sanctioned for violating the injunction when it was in place.[8] The Court of Chancery did not decide the motion because it vacated the injunction. Thus, we reinstate the injunction for the period it was operative, and unfortunately remand again to the Court of Chancery to decide the rule to show cause, and if a violation is found, impose an appropriate remedy such as extending the injunction.[9]

         (6) Goodman also claims that the Court of Chancery should not have revisited its earlier finding that inTEAM and Goodman were "transparent" about their competitive activities.[10] According to Goodman, the Court of Chancery erred when it reversed course on remand and found that his affirmative defenses "fail because ...


Buy This Entire Record For $7.95

Download the entire decision to receive the complete text, official citation,
docket number, dissents and concurrences, and footnotes for this case.

Learn more about what you receive with purchase of this case.