IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

INTEAM ASSOCIATES, LLC, a 

Delaware limited liability company, as 

successor-in-interest to SL-TECH 

TECHNOLOGIES, INC., a Delaware 

corporation,

Plaintiff,

v.

HEARTLAND PAYMENT SYSTEMS, 

LLC,

Defendant.

HEARTLAND PAYMENT SYSTEMS, 

LLC, 

Counterclaim Plaintiff,

v.

LAWRENCE GOODMAN, III and 

INTEAM ASSOCIATES, LLC,

Counterclaim Defendants.

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 C.A. No. 11523-VCMR 

ORDER CRAFTING REMEDY FOLLOWING REMAND

WHEREAS, on September 30, 2016, this Court issued a post-trial 

memorandum opinion in the instant case;

WHEREAS, on August 17, 2017, the Delaware Supreme Court issued an 

opinion affirming in part and reversing in part this Court’s opinion;
2 

WHEREAS, the Supreme Court “remand[ed] the case to the Court of 

Chancery to exercise its broad discretion to craft a remedy” consistent with its 

opinion;

NOW, THEREFORE, THE COURT HEREBY FINDS AND ORDERS AS 

FOLLOWS:

1. I have reviewed the parties’ briefs, supporting submissions, and the 

applicable law. 

2. I detail only the facts necessary to craft a remedy pursuant to the 

Supreme Court’s instruction. 1

 For a full recounting of the events leading up to this 

case, see Heartland Payment Systems, LLC v. inTEAM Associates, LLC, 171 A.3d 

544 (Del. 2017). 

3. Heartland Payment Systems, Inc. (“Heartland”) is a credit card 

payment processor for industries including K-12 schools. Tr. 611-12 (Lawler). 

Additionally, Heartland produces computer software to manage school meal 

programs for the K-12 foodservice industry. Id. In September 2011, Heartland 

 

1

 Citations to testimony presented at trial are in the form “Tr. # (X)” with “X” 

representing the name of the speaker. Citations to the transcript of the oral argument 

on remand are in the form “Oral Arg. Tr. #.” After being identified initially, 

individuals are referenced herein by their surnames without regard to formal titles 

such as “Dr.” No disrespect is intended. Joint Trial Exhibits are cited as “JX #.” 

Facts drawn from the parties’ Joint Pre-Trial Stipulation and Order are cited as 

“PTO ¶ #.” Unless otherwise indicated, citations to the parties’ briefs are to remand 

briefs. 
3 

entered into a purchase agreement (the “Asset Purchase Agreement”) to acquire the 

assets of School Link Technologies, Inc. (“SL-Tech”), a producer of computer 

software for food service operations management. JX 25. The Asset Purchase 

Agreement excluded one division of SL-Tech from the acquisition, a consulting 

business spun off to create inTEAM Associates, LLC (“inTEAM”). Id. at Ex. A, at 

A-4; Id. at Ex. M. Lawrence Goodman, III, SL-Tech’s former CEO, became CEO 

of inTEAM. PTO ¶ III.A.3.

4. The parties executed two additional agreements concurrent with the 

Asset Purchase Agreement. A co-marketing agreement (the “Co-Marketing 

Agreement”) granted Heartland and inTEAM the right to market one another’s 

products. JX 23 § 2.1. Under a consulting agreement (the “Consulting Agreement”), 

Goodman served as a strategic advisor to Heartland in exchange for a monthly 

salary. JX 22 ¶¶ 1, 3. The Asset Purchase Agreement, Co-Marketing Agreement, 

and Consulting Agreement each contain non-compete provisions. The Asset 

Purchase Agreement states that “[f]or a period of five (5) years from and after the 

Closing Date, neither [SL-Tech] nor [Goodman] will engage directly or indirectly . 

. . in providing any Competitive Services or Products or any business that SchoolLink conducts as of the Closing Date in any of the Restricted Territory.” JX 25 § 

5(n). The Co-Marketing Agreement states that “inTEAM shall not engage, directly 

or indirectly, on its own behalf or as a principal or representative of any person, in 
4 

providing any services or products competitive with the HPS Business.” JX 23 § 

9.1.1(B). It also states that “[Heartland] shall not engage, directly or indirectly . . . 

in providing any services or products competitive with the inTEAM Business . . . .” 

Id. § 9.1.1. The Consulting Agreement states:

[Goodman] shall not directly or indirectly, on behalf of 

himself or on behalf of any other person, firm or business 

entity: (i) become an owner of any outstanding capital 

stock, or a member or partner, of any company, 

partnership, or entity that engages in Competitive 

Business within the Restricted Territory; or (ii) perform or 

provide any services, whether as an employee, owner, 

consultant or otherwise, to, for or on behalf of any 

company, partnership, or entity that engages in 

Competitive Business within the Restricted Territory, if 

such services are the same or similar in character to the 

services performed or provided by [Goodman] to 

Heartland pursuant to this Agreement. 

JX 22 ¶ 11(a).

5. Despite the multitude of non-compete provisions, each of the parties

began taking competitive actions. “inTEAM developed a new software program 

module . . . with overlapping capabilities with” an SL-Tech software program 

acquired by Heartland. Heartland, 171 A.3d at 546. “Goodman tried to solicit one 

of Heartland’s customers. Heartland paired with one of inTEAM’s biggest 

competitors to submit a bid to provide software to the Texas Department of 

Agriculture.” Id.
5 

6. The parties subsequently brought claims and counterclaims in the Court 

of Chancery, with inTEAM seeking to enjoin Heartland’s actions and Heartland 

seeking to enjoin the behavior of inTEAM and Goodman. inTEAM, 2016 WL 

5660282, at *1. Following a four-day trial, this Court held that Heartland breached 

its non-compete obligations under the Co-Marketing Agreement, id. at *17, but that 

neither inTEAM nor Goodman violated any non-compete provisions. Id. at *14, 

*23. This Court also held that Goodman violated certain non-solicitation obligations 

contained in the Consulting Agreement. Id. at *25. This Court enjoined Heartland 

from engaging in competitive activities from September 30, 2016 to March 21, 2018, 

id. at *27, and ordered Goodman to disgorge his consulting fees from “July, August, 

and September 2014, totaling $50,003.01” due to his breach of the non-solicitation 

obligations contained in the Consulting Agreement. Id. at *28.

7. On appeal, the Supreme Court affirmed that “Heartland breached its 

contractual obligations by collaborating with an inTEAM competitor, and Goodman 

breached by soliciting a customer of Heartland.” Heartland, 171 A.3d at 547. 

Further, the Supreme Court noted that the Court of Chancery “did not abuse its 

discretion . . . [in the] assessed damages against Goodman.” Id. The Supreme Court, 

however, “reverse[d] the Court of Chancery’s finding that Goodman and inTEAM 

did not breach their non-compete obligations under the various agreements,” holding 

instead that Goodman and inTEAM each breached their non-compete obligations in 
6 

2012. Id. The Supreme Court “remand[ed] the case to the Court of Chancery to 

exercise its broad discretion to craft a remedy sufficient to compensate Heartland for 

Goodman’s and inTEAM’s breaches of the transaction documents.” Id. The 

Supreme Court also noted that the Court of Chancery may “consider certain 

affirmative defenses . . . [that were] properly raised and briefed . . . at trial [which] 

the Court of Chancery did not reach . . . because it found no violation” of the noncompete obligations by inTEAM and Goodman. Id. at 572.

8. On remand, the parties primarily seek injunctive relief to enforce the 

contractual non-compete provisions against each other. Heartland seeks to (i) vacate 

the standing injunction against it and (ii) enjoin inTEAM and Goodman from selling 

competing products. Def.’s Opening Br. 9. inTEAM asks the Court to let the 

existing injunction against Heartland stand. Pl. & Countercl. Def.’s Answering Br. 

39. Both parties raise the affirmative defense of unclean hands. Def.’s Opening Br. 

12; Pl. & Countercl. Def.’s Answering Br. 23. I agree and conclude that the doctrine 

of unclean hands bars either party from receiving the equitable relief of an 

injunction. See, e.g., Alpha Builders, Inc. v. Sullivan, 2004 WL 2694917, at *2 (Del. 

Ch. Nov. 5, 2004) (“A request for injunctive relief clearly constitutes equitable relief 

over which this Court has jurisdiction.”). 

9. “[H]e who comes into equity must come with clean hands.” In re Silver 

Leaf, L.L.C., 2005 WL 2045641, at *11 (Del. Ch. Aug. 18, 2005) (alteration in 
7 

original) (quoting Bodley v. Jones, 59 A.2d 463, 469 (Del. 1947)). “When one [who] 

files a bill of complaint seeking to set the judicial machinery in operation and to 

obtain some remedy has violated conscience or good faith or other equitable 

principles in his conduct, then the doors of the court of equity should be shut against 

him.” Id. (alteration in original) (quoting Bodley, 59 A.2d at 469). “[T]he unclean 

hands doctrine is aimed at providing courts of equity with a shield from the 

potentially entangling misdeeds of the litigants in any given case.” Id. at *12 

(alteration in original) (quoting Merck & Co. v. SmithKline Beecham Pharms. Co., 

1999 WL 669354, at *45 (Del. Ch. Aug. 5, 1999)). 

10. The Court “has broad discretion in determining whether to apply the 

doctrine of unclean hands.” SmithKline Beecham Pharm. Co. v. Merck & Co., 766 

A.2d 442, 448 (Del. 2000). The Court is “not bound by formula or restrained by any 

limitation that tends to trammel the free and just exercise of discretion.” Nakahara 

v. NS 1991 Am. Tr., 718 A.2d 518, 522-23 (Del. Ch. 1998) (quoting Keystone Driller 

Co. v. Gen. Excavator Co., 290 U.S. 240, 245-46 (1933)). “But the Court’s 

discretion is not completely unlimited.” McKenna v. Singer, 2017 WL 3500241, at 

*14 (Del. Ch. July 31, 2017). For the Court to apply the doctrine of unclean hands, 

the inequitable conduct of the party against whom unclean hands is being applied 

“must have an ‘immediate and necessary’ relation to the claims under which relief 
8 

is sought.” Nakahara, 718 A.2d at 523 (citing Kousi v. Sugahara, 1991 WL 248408, 

at *2 (Del. Ch. Nov. 21, 1991)).

11. Goodman and inTEAM began breaching their respective non-compete 

obligation in 2012. Heartland, 171 A.3d at 547. Heartland began breaching its noncompete obligations in 2014. Id. at 571. Moreover, the parties each took steps to 

conceal their respective violations from each other. For instance, in an email from 

November 11, 2012, an inTEAM nutritional consultant stated that “we can’t be 

straight up . . . because that would be invading [Heartland’s] territory!” Id. at 568 

n.90. inTEAM’s former Chief Operations Officer also wrote an email to the 

company’s vice president of operations stating “you know [we’re] basically 

developing a competing product with [Heartland] now,” id. at 554, a view that 

inTEAM never shared with Heartland. Similarly, “Heartland teamed with Colyar[, 

a direct competitor to inTEAM,] to provide the same functionality that the Asset 

Purchase Agreement and the Co-Marketing Agreement reserve[d] for inTEAM” in 

a bidding process in Texas, inTEAM, 2016 WL 5660282, at *18, but only revealed 

its actions to inTEAM after losing the bidding process eighteen months later. 

Heartland, 171 A.3d at 555. 

12. Heartland and inTEAM seek equitable relief from the Court in the form 

of injunctions enforcing non-compete obligations. And “[b]oth parties argue that 

the other’s claims should be barred by the doctrine of unclean hands.” In re Silver 
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Leaf, 2005 WL 2045641, at *12. Both parties, Heartland and inTEAM, violated 

their own respective non-compete obligations and went to great lengths to hide the 

competitive actions from the other side. 2

 The inequitable conduct of Heartland and 

inTEAM has an “‘immediate and necessary’ relation to the claims under which relief 

is sought.” Nakahara, 718 A.2d at 523 (citing Kousi, 1991 WL 248408, at *2). The 

Court will not enforce non-compete obligations where the party seeking such 

injunctive relief surreptitiously violated its own non-compete obligations and instead 

will avoid the “entangling misdeeds of the litigants.” In re Silver Leaf, 2005 WL 

2045641, at *12 (quoting Merck, 1999 WL 669354, at *45). Thus, I vacate the 

injunction against Heartland, decline to issue a new injunction against Heartland, 

and decline to enjoin inTEAM or Goodman from their respective behaviors.

13. In addition to injunctive relief, Heartland also seeks monetary damages 

against Goodman for breach of the Asset Purchase Agreement and Consulting 

Agreement. The Court of Chancery found, and the Supreme Court affirmed, that 

Goodman should pay Heartland $50,003.01 as compensation for his breach of 

certain non-solicitation obligations in the Consulting Agreement. Heartland, 171 

A.3d at 571. Now, Heartland asks that the Court order Goodman to pay back “each 

 

2

 To the extent my prior opinion stated that inTEAM did not have unclean hands, 

inTEAM, 2016 WL 5660282, at *23, that ruling relied heavily on my finding that 

inTEAM did not breach its non-compete obligations. The Supreme Court reversed 

that finding, and so I must reexamine the argument, as I have done here. 
10

and every benefit Goodman received from inTEAM while it was operating as a 

competitive business . . . [including] Goodman’s wages[,] . . . Goodman’s share of 

rental income received from leasing commercial property to inTEAM[,] . . . and the 

tax benefits enjoyed by Goodman from running inTEAM as a tax shelter” for 

Goodman’s breach of the non-compete provision contained in the Asset Purchase 

Agreement. Def.’s Opening Br. 14-15. Heartland also seeks an additional $400,000 

for Goodman’s breach of the non-compete provision contained in the Consulting 

Agreement. Id. at 13-14.

14. The Asset Purchase Agreement provides that in the event of a breach 

by a “Seller or Seller Shareholder[],” the “Seller or Seller Shareholder[] . . . [must] 

account for and pay over to the Non-Breaching Party all payments, profits, monies, 

accruals, increments, or other benefits derived or received by Seller or any Seller 

Shareholder[] . . . as a result of any transaction constituting a breach of any of the 

restrictive covenants.” JX 25, § 5(q)(ii). Even if the Court were to conclude that 

Goodman qualifies as a “Seller Shareholder” for the purpose of the Asset Purchase 

Agreement, Heartland has not established what damages it is owed as a result of 

Goodman’s breach of the Asset Purchase Agreement’s non-compete provisions. 

Heartland readily admits that “it’s not possible to apportion damages on a 

transaction-by-transaction basis.” Oral Arg. Tr. 16. Instead, Heartland argues that 

“Goodman’s pervasive involvement in the business” means that Goodman should 
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pay back “all benefits that . . . Goodman enjoyed, including the wages he was paid 

by inTEAM, the rental income he received from leasing commercial property to 

inTEAM, and the tax benefits that he received as a result of inTEAM’s operating 

losses.” Id. at 16-17. But the Asset Purchase Agreement explicitly requires damages 

to be limited to those that “result [from] any transaction constituting a breach of any 

of the restrictive covenants.” JX 25, § 5(q)(ii). Heartland fails to make any attempt 

to identify which of these alleged damages, if any, flow from Goodman’s breach of 

the Asset Purchase Agreement; thus, Heartland has not established that it is 

contractually entitled to damages under the Asset Purchase Agreement. 

15. Regarding money damages under the Consulting Agreement, “in the 

event of breach [of the Consulting Agreement], Heartland has ‘no obligation to pay 

[Goodman] any compensation.’” inTEAM, 2016 WL 5660282, at *28 n.322 

(quoting JX 22 ¶ 3). On this basis, the Court of Chancery held, and the Supreme 

Court affirmed, that Goodman must return consulting fees earned from his initial 

breach of the Consulting Agreement through the end of the Consulting Agreement. 

Heartland, 171 A.3d at 571-72. In computing damages, the Court of Chancery used 

July 2014 as the initial date of breach, when Goodman began violating his nonsolicitation obligations, and September 2014 as the final date, when the Consulting 

Agreement ended. Id. at 571. But the Supreme Court determined that Goodman 

began breaching his non-compete obligations under the Consulting Agreement in 
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2012. Id. at 572. Heartland offers July 2012 as the start date of that breach. Oral 

Arg. Tr. 54-55. The Consulting Agreement specified that Goodman was to be paid 

$16,666.67 per month. JX 22 ¶ 3. Thus, unless an affirmative defense applies, 

Goodman will owe Heartland for twenty-seven months—July 2012 through 

September 2014—of consulting fees, equal to $450,000.09. Because I already have 

ordered Goodman to pay $50,003.01, this would result in an additional award of 

$399,997.08 in money damages from Goodman to Heartland. 

16. The Supreme Court instructed the Court of Chancery to consider 

Goodman’s affirmative defenses to his breach of his non-compete obligations. 

Heartland, 171 A.3d at 572. Goodman asserts the affirmative defenses of unclean 

hands, laches, waiver, acquiescence, and equitable estoppel. Pl. & Countercl. Def.’s 

Answering Br. 11-26.3

 Money damages are legal in nature, and “the ‘unclean hands’ 

doctrine bars equitable, but not legal, relief.” Lehman Bros. Hldgs. v. Spanish 

Broad. Sys., Inc., 2014 WL 718430, at *7 n.47 (Del. Ch. Feb. 25, 2014), aff’d, 105 

A.3d 989 (Del. 2014); see also In re Estate of Tinley, 2007 WL 2304831, at *1 (Del. 

Ch. July 19, 2007) (explaining that “a litigant seeking equitable relief who appears 

 

3

 At trial, Goodman and inTEAM also argued that Heartland failed to mitigate 

damages. inTEAM, 2016 WL 5660282, at *13. But Goodman and inTEAM did not 

raise this defense in the Answering Brief on remand. Pl. & Countercl. Def.’s 

Answering Br. 11-26. “Issues not briefed are deemed waived.” Emerald P’rs v. 

Berlin, 726 A.2d 1215, 1224 (Del. 1999) (citing Loudon v. Archer-Daniels-Midland 

Co., 700 A.2d 135, 140 n.3 (Del. 1997); Murphy v. State, 632 A.2d 1150, 1152 (Del. 

1993)). 
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with unclean hands will find that relief barred to her,” but that the doctrine will not 

bar legal relief.) I decline to apply the equitable defense of unclean hands to bar the 

legal remedy of money damages expressly mandated by the contractual terms of the

Consulting Agreement. 

17. In order for the affirmative defenses of laches, waiver, acquiescence, or 

equitable estoppel to bar Heartland’s claims, Goodman must show that Heartland 

had knowledge of the underlying breach. See Reid v. Spazio, 970 A.2d 176, 182-83 

(Del. 2009) (quoting Homestore, Inc. v. Tafeen, 888 A.2d 204, 210 (Del. 2005)) 

(“[L]aches generally requires the establishment of three things: first, knowledge by 

the claimant; second, unreasonable delay in bringing the claim, and third, resulting 

prejudice to the defendant.”); Roam-Tel P’rs v. AT&T Mobility Wireless Operations 

Hldgs. Inc., 2010 WL 5276991, at *9 (Del. Ch. Dec. 17, 2010) (quoting Realty 

Growth Inv’rs v. Council of Unit Owners, 453 A.2d 450, 456 (Del. 1982); (“Waiver 

is the voluntary and intentional relinquishment of a known right.”); Dirienzo v. Steel 

P’rs Hldgs. L.P., 2009 WL 4652944, at *7 (Del. Ch. Dec. 8, 2009) (quoting Cantor 

Fitzgerald, L.P. v. Cantor, 2000 WL 307370, at *24 (Del. Ch. Mar. 13, 2000).

(Acquiescence requires that a “complainant has full knowledge of his rights and the 

material facts.”); Cornerstone Brands, Inc. v. O’Steen, 2006 WL 2788414, at *3, 

n.14 (Del. Ch. Sept. 20, 2006) (citing Scott-Douglas Corp. v. Greyhound Corp., 304 

A.2d 309, 318 (Del. Super. 1973)) (“In order to prevail on an equitable estoppel 
14

theory . . . [the party to be estopped must have] knowledge, actual or constructive, 

of the real facts.”). In the post-trial memorandum opinion, this Court determined 

that Goodman did not breach his non-compete obligations and that Heartland was 

aware of Goodman and inTEAM’s development of its software. inTEAM, 2016 WL 

5660282, at *23. The Supreme Court, however, concluded that Goodman’s behavior 

constituted breach of his non-compete obligations and that Goodman and inTEAM 

took evasive steps to conceal their behavior from Heartland. See Heartland, 171 

A.3d at 544, 555, 568 n.90. I read the Supreme Court’s opinion as a reversal of both 

the conclusion that Goodman did not breach the non-compete and the finding that 

Heartland had knowledge of Goodman’s and inTEAM’s actions.4

 Thus, Goodman’s 

 

4

 Heartland points to several documents to support its argument that Goodman and 

inTEAM concealed their competitive actions from Heartland. Oral Arg. Tr. 19-33; 

Def.’s Opening Br. 4-6. In its brief, Heartland specifically identifies the email from 

inTEAM’s Vice President of Operations, Erik Ramp, to Heartland’s Terry Roberts 

dated June 8, 2012, as evidence that Goodman attempted to assure Roberts that 

inTEAM was not trying to develop competitive software. Def.’s Opening Br. 4. In 

the post-trial memorandum opinion, I found that this email, sent eleven days after 

the federal guidelines became effective, demonstrated Heartland’s knowledge of 

Goodman and inTEAM’s actions. inTEAM, 2016 WL 5660282, at *23. Although 

the Supreme Court does not explicitly overrule this point, the only logical 

conclusion is that it agreed with Heartland that Ramp’s email, along with other 

evidence presented by Heartland, reflect concealment rather than disclosure. 

Otherwise, waiver would have been the necessary outcome in the Supreme Court’s 

opinion. Further, the same logic that led to the Supreme Court’s finding that 

Heartland would not enter into a $17 million contract only to immediately allow 

inTEAM to breach, Heartland, 171 A.3d at 564, dictates a finding that Heartland 

would not allow for an immediate waiver of that breach. 
15

affirmative defenses of laches, waiver, acquiescence, and equitable estoppel fail 

because Heartland lacked knowledge of Goodman’s breaching behavior. 

18. For the reasons stated above, I vacate the existing injunction against 

Heartland, decline to issue new injunctions against Heartland, inTEAM, or 

Goodman, and order Goodman to pay $399,997.08 in money damages for violating 

his non-compete obligations.

/s/ Tamika Montgomery-Reeves

Vice Chancellor 

Dated: March 29, 2018