United States District Court, D. Delaware
STEVE VATIDIS, in his capacity as Principal Shareholder, Plaintiff/Counterclaim Defendant,
TRIMBLE, INC., Defendant/Counterclaim Plaintiff.
C. Schiltz, Drinker Biddle & Reath LLP, Wilmington, DE
19801; Paul R. Mastrocola, Andrea L. Martin, Michael A.
DeIulis, Burns & Levinson LLP, Boston, MA; Scott R.
Haiber, Hogan Lovells, U.S. LLP, Baltimore, MD; Pieter Van
Tol, Hogan Lovells U.S. LLP, New York, NY - attorneys for
Friedlander, Christopher M. Foulds, Christopher P. Quinn,
Friedlander & Gorris P.A.; Teresa H. Michaud, Baker &
McKenzie LLP, Los Angeles, CA - attorneys for Defendant July
16, 2019 Wilmington, Delaware
NOREIKA, U.S. DISTRICT JUDGE
action arises out of an acquisition by defendant Trimble,
Inc. (“Trimble”) of a collection of software
companies (collectively, the “Target Companies”)
from plaintiff Steve Vatidis (“Vatidis”), the
principal shareholder of each of those companies, pursuant to
a Share Purchase Agreement (“SPA”). Vatidis
alleges that Trimble has breached its obligations under the
SPA (Count I), breached the implied covenant of good faith
and fair dealing (Count II), and failed to timely object to a
Claim Notice thereby entitling Vatidis to receive the
indemnification amount set forth in that Claim Notice (Count
III). (D.I. 1 ¶¶ 74-89).
pending before the Court is Vatidis's Motion for Judgment
on the Pleadings as to Count III of the Complaint. (D.I. 14).
The Court has subject matter jurisdiction over this action
pursuant to 28 U.S.C. § 1332. For the following reasons,
the Motion for Judgment on the Pleadings is DENIED.
Relevant Terms of the SPA
July 29, 2014, the parties entered into the SPA under which
Trimble agreed to purchase the Target Companies from the
shareholders of those companies (the
“Shareholders”). (D.I. 1 ¶ 5). The SPA
identifies Vatidis as the “Principal Shareholder,
” which makes him the authorized representative of all
Shareholders. (D.I. 19 at § 10.1). The transaction
closed on August 15, 2014. (D.I. 1 ¶ 6).
8 of the SPA governs indemnification. (D.I. 19). Section 8.1
sets out the conditions under which the Shareholders are
required to indemnify Trimble, while Section 8.2 identifies
the conditions under which Trimble is required to indemnify
the Shareholders. (Id. at §§ 8.1-8.2).
Section 8.3 sets out the procedure for making an
indemnification claim. Specifically, a party seeking
indemnity under Article 8 (“the Indemnified
Party”) must give written notice (hereinafter,
“the Claim Notice”) to the other party
(“the Indemnifying Party”) containing: (i) a
description and estimated amount of any Losses incurred or
reasonably expected to be incurred, (ii) a reasonable
explanation for the basis of the indemnification claim, and
(iii) a demand for payment of the Losses. (Id. at
30 days of delivery of the Claim Notice, the Indemnifying
Party must provide a written response either agreeing to or
disputing that the Indemnified Party is entitled to the
Losses described in the Claim Notice. (Id. at §
8.3(b)). If the Indemnifying Party disputes the claim, the
written response (“an Objection Notice”) must set
forth “in reasonable detail” each disputed item,
the basis for the dispute, and a certification that all
disputes are made in good faith. (Id. at §
8.3(b)(ii)). If the Indemnifying Party fails to deliver an
Objection Notice within 30 days of delivery of the Claim
Notice, “then the Indemnifying Party will be deemed to
have irrevocably accepted the Claim Notice and the
Indemnifying Party will be deemed to have irrevocably agreed
to pay the Losses at issue in the Claim Notice.”
(Id. at § 8.3(c)).
The Vatidis Claim Notice
October 2, 2017, Vatidis sent a Claim Notice to Trimble
pursuant to Section 8.3(a) of the SPA. (D.I. 1 ¶ 62).
Therein, Vatidis asserted that Trimble was in breach of the
SPA for, inter alia: (i) refusing or failing to
negotiate in good faith a resolution of a third-party claim
made against the Target Companies by the software company
Uniface, (ii) excluding Vatidis from discussions concerning
the claim made by Uniface, and (iii) entering into a
settlement agreement with Uniface without Vatidis's prior
written consent. (Id. ¶ 63). The Claim Notice
included a description and estimate of the amount of Losses
incurred as of that date. (D.I. 1, Ex. 3).
alleges that Trimble failed to provide an Objection Notice
within 30 days, as required by Section 8.3(b) of the SPA.
(D.I. 1 ¶ 65). Vatidis further alleges that, as a
result, Trimble is deemed under Section 8.3(c) to have
irrevocably accepted the Claim Notice and irrevocably agreed
to pay the Losses at issue therein. (Id. at ¶