IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

THE ANSCHUTZ CORPORATION and 

LIGHTEDGE HOLDINGS, LLC,

 Plaintiffs,

 v.

BROWN ROBIN CAPITAL, LLC, 

SIERRA TWO INTERNET, INC., 

LUCAS BRAUN, RYAN ROBINSON, 

JACK D’ANGELO, BOBBY BOUGHTON 

and MICHAEL SMERKLO, 

 Defendants.

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C.A. No. 2019-0710-JRS

MEMORANDUM OPINION

Date Submitted: April 8, 2020

Date Decided: June 11, 2020

Michael A. Pittenger, Esquire, Berton W. Ashman, Jr., Esquire, and David M. Hahn, 

Esquire of Potter Anderson & Corroon LLP, Wilmington, Delaware; and 

William M. Regan, Esquire and David R. Michaeli, Esquire of Hogan 

Lovells US LLP, New York, New York; and Mark C. Hansen, Esquire and 

John Thorne, Esquire of Kellogg Hansen Todd Figel & Frederick PLLC, 

Washington, DC, Attorneys for Plaintiffs.

Rudolf Koch, Esquire, Kevin M. Gallagher, Esquire and Ryan D. Konstanzer, 

Esquire of Richards, Layton & Finger, P.A., Wilmington, Delaware; Jack W. 

Pirozzolo, Esquire and Ben Schwarz, Esquire of Sidley Austin LLP, Boston, 

Massachusetts; and Christopher M. Egleson, Esquire of Sidley Austin LLP, 

Los Angeles, California, Attorneys for Defendants.

SLIGHTS, Vice Chancellor
1

This is a dispute between a vexed buyer and an incredulous seller following 

the sale of a business. The buyer alleges it is the victim of contractual breaches and 

fraud; the seller maintains it sold the buyer precisely what was bargained for. 

In other words, it is a version of a dispute as old and abiding as commerce itself. 

In early 2018, Plaintiff, LightEdge Holdings, LLC (“LightEdge” or the 

“Buyer”), initiated negotiations with Defendants, Brown Robin Capital, LLC 

(“Brown Robin”), Sierra Two Internet, Inc. (“Sierra”), Lucas Braun (“Braun”), Ryan 

Robinson (“Robinson”), Jack D’Angelo (“D’Angelo”) and Michael Smerklo 

(“Smerklo”) (collectively, the “Sellers”), to acquire OnRamp Access, LLC 

(“OnRamp” or the “Company”). In the midst of negotiations, LightEdge and its 

parent company, Plaintiff, the Anschutz Corporation (“Anschutz”), were 

discouraged when Sellers disclosed that OnRamp had experienced disappointing 

monthly sales growth and that one of OnRamp’s largest customers was significantly 

scaling back its business. Sellers assuaged these concerns by representing there were 

no further material customer roll-backs, actual or threatened, and by showcasing a 

promising pipeline of near-term business opportunities that OnRamp was vigorously 

pursuing. Satisfied, Buyer closed the transaction on July 2, 2018, with an all-cash 

purchase price of $106 million (the “Acquisition”). 

Buyer’s satisfaction was short lived. Two months after closing, Yeti Coolers, 

one of OnRamp’s largest customers, reduced its business with OnRamp by nearly 
2

half. Sellers had never disclosed Yeti’s multiple requests for major service 

reductions during the pendency of the negotiations. Adding insult to injury, Buyer 

then discovered that many of the sales opportunities listed in OnRamp’s sales

pipeline had either been rejected out-of-hand by the target business well before 

closing, or were far more speculative than their listed status in the pipeline data 

suggested. 

In the wake of these disconcerting post-closing discoveries, Buyer initiated 

this action in which it brings claims against Sellers for breach of contract and fraud, 

along with a slew of other alleged common law and statutory violations. Sellers

answer with the common refrain that Buyer’s claims amount to nothing more than 

post-closing buyer’s remorse, and maintain that Buyer has failed to well plead any 

breach of the operative transaction document, the Unit Purchase Agreement 

(the “UPA”), any fraud, whether in the inducement to contract or otherwise, or any 

other common law or statutory wrongdoing. They have moved to dismiss all counts 

of the complaint under Chancery Rule 12(b)(6) for failure to state viable claims. 

After carefully considering the complaint and the UPA, I am satisfied that: 

(1) most of Buyer’s breach of contract claims are well-pled and not foreclosed by 

the unambiguous language of the UPA; (2) Buyer’s fraud claims are well-pled and 

not barred as bootstrapped breach of contract claims; (3) Buyer’s claims based on 

extra-contractual representations are not barred by an unambiguous anti-reliance 
3

provision; and (4) Buyer’s unjust enrichment claim is not barred as duplicative of its 

breach of contract claims. The motion to dismiss those claims is denied. 

Buyer has failed to state viable claims, however, for aiding and abetting, civil 

conspiracy, conversion, Colorado statutory theft and securities fraud and Texas 

statutory fraud and securities fraud. The motion to dismiss those claims, therefore, 

must be granted.

I. BACKGROUND

I have drawn the facts from the well-pled allegations in the Verified 

Complaint1and documents incorporated by reference or integral to that pleading.2 

For purposes of this Rule 12(b)(6) motion, I accept those well-pled facts as true.3 

A. The Parties

Plaintiff, Anschutz, is a Delaware Corporation with headquarters in Denver, 

Colorado.4 Anschutz owns 96% of LightEdge.5

 

1 Citations to the Verified Complaint are to “Compl. ¶ __.”

2 Wal-Mart Stores, Inc. v. AIG Life Ins. Co., 860 A.2d 312, 320 (Del. 2004) (noting that on 

a Motion to Dismiss, the Court may consider documents that are “incorporated by 

reference” or “integral” to the complaint). 

3

In re Gen. Motors (Hughes) S’holder Litig., 897 A.2d 162, 169 (Del. 2006). 

4 Compl. ¶ 14. 

5 Compl. ¶ 15. 
4

Plaintiff, LightEdge, is a Delaware limited liability company with

headquarters in Des Moines, Iowa.6 LightEdge is identified as the Buyer in the UPA. 

Defendant, Brown Robin, is a Delaware limited liability company with 

headquarters in Austin, Texas.7 Its members reside in Texas, California, 

Massachusetts and New York.8 Brown Robin is managed by Braun and Robinson, 

and it owned 93.2% of OnRamp’s equity at closing, making it a Seller.

9

Defendant, Sierra, is a Texas corporation with headquarters in Austin, 

Texas.10 Sierra is owned and controlled by OnRamp’s founder, nonparty Chad 

Kissinger, and is a Seller.

11

 

Defendant, Lucas Braun, served as CEO of OnRamp at the time of the 

Acquisition.12 He is a Seller and a citizen of Texas.13 

 

6 Compl ¶ 15. 

7 Compl. ¶ 16; Defs.’ Opening Br. in Supp. of Their Mot. to Dismiss (“OB”), Ex. A 

(the “UPA”) 1. 

8 Compl. ¶ 16. 

9 Compl. ¶¶ 17, 19. 

10 Compl. ¶ 20. 

11 Id. 

12 Compl. ¶ 21. 

13 Id. 
5

Defendant, Ryan Robinson, served as Chairman and President of OnRamp at 

the time of the Acquisition.14 He is a Seller and a citizen of Texas.15

Defendant, Jack D’Angelo, served as CFO of OnRamp at the time of the 

Acquisition.16 He is a Seller and a citizen of Texas.17

Defendant, Mike Smerklo, is a Seller and a citizen of Texas.18 His role at 

OnRamp, if any, is not pled in the Complaint.

Defendant, Bobby Boughton, was OnRamp’s Vice President of Sales and is a 

citizen of Texas.19 Although Boughton is not a Seller, he received a $168,578 bonus 

when the Acquisition closed and was subsequently promoted to Executive Vice 

President of Sales at LightEdge.20

 

14 Compl. ¶ 22. 

15 Id. 

16 Compl. ¶ 23. 

17 Id. 

18 Compl. ¶ 24. 

19 Compl. ¶ 25. 

20 Id. I will collectively refer to Braun, Robinson, D’Angelo and Boughton as the 

“OnRamp Insiders,” as they are referred to in the Complaint. 
6

Nonparty, OnRamp, is a provider of IT support and hybrid computing, cloud 

computing, managed services and data center services.

21

 It operates data centers for 

its customers’ private data and IT infrastructure.22

B. The Disappointing Sales Data 

Sellers began to pursue a sale of OnRamp in early 2018, and initiated an 

auction process.23 LightEdge participated in the auction and, after several revised 

offers, entered into a letter of intent with Sellers on May 18, 2018.24 The purchase 

price was negotiated by referencing multiples of OnRamp’s adjusted EBITDA, 

resulting in a final sale price of $106 million.25 Anschutz committed to provide 

LightEdge with $62 million to finance the Acquisition.

26

On May 4, 2018, a few weeks before the letter of intent was signed, Sellers

disclosed to LightEdge and Anschutz that a significant OnRamp customer, 

Spiceworks, had cancelled its subscription for services.

27 This cancellation was 

 

21 Compl. ¶ 28. 

22 Id. 

23 Compl. ¶ 29. 

24 Id. 

25 Compl. ¶¶ 30–31. 

26 Compl. ¶ 2. 

27 Compl. ¶ 54. 
7

projected to reduce OnRamp’s annual recurring revenue by $600,000.

28

 Shortly 

after disclosing this cancellation, OnRamp provided Anschutz and LightEdge with 

its April sales data.29 That data revealed the Company had generated only $12,000 

in new monthly recurring revenue in April, less than a third of its $42,000 target.30 

C. The Falsified Salesforce Pipeline Data

The Spiceworks cancellation and disappointing April sales data prompted 

Buyer to reconsider whether it would continue to pursue the Acquisition.

31

 Before 

it pulled the plug, however, Buyer wanted a clearer understanding of what 

opportunities might be awaiting OnRamp down the road. Accordingly, on May 19, 

Buyer requested the Company’s pipeline data from Salesforce.com (“Salesforce”), 

an online listing of the Company’s sales opportunities, and scheduled a telephone 

conference with Company management for the next week to discuss the data.32

OnRamp’s management agreed to the meeting; before providing the requested data,

however, under the direction of the OnRamp insiders, Company management 

 

28 Id. 

29 Id. 

30 Id. 

31 Compl. ¶ 55. 

32 Id. 
8

secretly falsified the pipeline by adding more than $6 million in illusory projected

annual revenue.33 

According to the Complaint, the falsification is revealed upon close 

examination of the Salesforce databank. For example, before the alleged

falsification, the pipeline did not include any active proposal to sell SAP hosting 

services to Yeti.34 While the Company had solicited Yeti’s business, when it became 

clear Yeti was not interested, the opportunity was originally designated as “0-Closed 

Lost” in the Salesforce pipeline, reflecting no potential for a sale.

35

 On May 20, the 

day after LightEdge requested the sales pipeline data, Braun logged into Salesforce 

and manually changed the Yeti status designation from “0-Closed Lost” to 

“quoted”—indicating a far more advanced stage in the sales process—even though 

the Company had never provided Yeti with a quote and Yeti had already 

demonstrated its lack of interest.

36

Additionally, Boughton instructed the OnRamp sales team to revise the 

pipeline to reflect that the Company had “quoted” the American Automobile 

Association (“AAA”) a deal that would bring in $3.6 million in annual recurring 

 

33 Compl. ¶ 57. 

34 Compl. ¶ 58.

35 Id. 

36 Compl. ¶ 59. 
9

revenue.

37 This sale, if closed, would make AAA the Company’s largest customer

by a considerable margin.38 In actuality, the Company’s entire relationship with 

AAA comprised a single meeting, occurring months before the Salesforce entry, 

during which OnRamp did not identify any specific services it would provide for 

AAA, much less provide a quote.

39

D. The Misleading Interim Financial Statements

In addition to providing false sales pipeline data, Sellers also provided 

materially misleading financial statements during due diligence.

40

 In this regard, 

LightEdge alleges certain revenues and accounts receivable listed in OnRamp’s 

interim financial statements—unaudited financials covering the period from the end 

of Q1 2018 until the signing of the UPA—were known to be uncollectible.41

For example, revenues and accounts receivable were listed on the interim statements 

from a customer that had disconnected all services in January 2018.42 The interim 

statements also treated $51,000 owed by a customer as an “account receivable” when 

 

37 Compl. ¶ 64.

38 Id. 

39 Id. The Complaint lists other examples of allegedly falsified Salesforce data. 

Compl. ¶¶ 66–67.

40 Compl. ¶ 75. 

41 Compl. ¶¶ 76–80. 

42 Compl. ¶ 77. 
10

the customer had only paid $1,000 since September 2017 and was ignoring further 

collection efforts.43 Plaintiffs allege these and other misstatements inflated the 

purchase price paid for OnRamp.44

E. Yeti Substantially Decreases its OnRamp Services

As of March 31, 2018, in the midst of the most active negotiations leading to 

the Acquisition, Yeti was Onramp’s sixth largest customer, providing the Company

with $1,100,280 of annual recurring revenue.

45

 As far as LightEdge and Anschutz 

were concerned, Yeti would continue to be a major source of revenue for the 

Company after the Acquisition.46 Unbeknownst to Buyer, however, Yeti had 

repeatedly communicated to OnRamp its intent to slash its use of the Company’s

services by nearly half.47

Specifically, on December 6, 2017, Yeti notified OnRamp in writing that it 

planned to “begin reducing some of our costs” and asked OnRamp for “dates to 

action for a timeline on achieving these [reductions in service.]”48 On January 22, 

 

43 Compl. ¶ 79. 

44 Compl. ¶ 80. 

45 Compl. ¶ 34. Yeti was the Company’s fourth largest customer in 2016 and fifth largest 

in 2017. Id. 

46 Compl. ¶¶ 35–38. 

47 Compl. ¶¶ 38–45. 

48 Compl. ¶ 39. 
11

2018, a Yeti employee called an OnRamp employee to schedule a meeting to discuss 

planned service reductions, and the next day Yeti informed the Company that it was 

seeking to reduce its monthly purchases by approximately $42,000 to $48,000.49

Braun described this meeting to Boughton as “a bit tragic,” and Boughton responded 

by informing Braun that, while there was a small new project for Yeti in the works,

a large project involving SAP services “was not even in the kitchen, let alone on the 

back burner.”50 

Over the following months, Yeti contacted OnRamp numerous times 

regarding desired service reductions, including an April 23, 2018 email where Yeti 

outlined requested service cuts amounting to just over $40,000 in monthly recurring 

revenue.

51

 None of these communications were disclosed to Buyer.

52 As it had been 

previewing it would do for months, Yeti reduced its services by approximately 

$42,000 per month in September 2018.53

 

49 Compl. ¶ 41. 

50 Compl. ¶ 42. 

51 Compl. ¶¶ 43–45. 

52 Compl. ¶ 48. 

53 Compl. ¶ 46. 
12

F. The Unit Purchase Agreement

Buyer’s acquisition of OnRamp is memorialized in the UPA. As is typical of 

a document negotiated by sophisticated parties and drafted by experienced counsel, 

the UPA documents a careful allocation of risk as reflected, in part, within 

assiduously delineated Seller representations and warranties about the Company.54 

Important for purposes of Buyer’s claims are the representations contained in 

Sections 2.6, 2.10, 2.11 and 2.20. 

In Section 2.6, Sellers represent that all of the financial statements provided 

to LightEdge, including interim financial statements, are accurate and in accordance 

with Generally Accepted Accounting Principles (“GAAP”).55 They also represent 

that OnRamp’s “books and records . . . reflect only valid transactions and are 

complete and correct in all material respects.”56

In Section 2.10, Sellers represent that “the Company has conducted its 

business in the ordinary course of business consistent with past practices” and that 

OnRamp has not “terminated or amended in any material respect any Material 

 

54 UPA §§ 2.1–2.23. 

55 UPA § 2.6. 

56 Id. 
13

Contract . . . .”57 Material Contracts are then identified in the Disclosure Schedules

at Section 2.11. 

In Section 2.11, Sellers represent that the Disclosure Schedules

(at Section 2.11) contain a complete list of Material Contracts to which the Company 

is bound.58 They further represent that, “[o]ther than in the ordinary course of 

business consistent with past practices, the Company is not participating in any 

discussions or negotiations regarding any material modification of . . . any Material 

Contract . . . .”59 Section 2.11(f) of the Disclosure Schedules lists Yeti as a Material 

Contract, and Section 2.11(r) states that OnRamp is “[i]n discussions about a large 

potential upgrade related to Yeti’s migration to a new ERP platform; as part of that 

there could be additional downgrades along the way, but the upside far outweighs 

the potential downgrades.”60 Plaintiffs allege this purported “upgrade” was 

OnRamp’s dead-in-the-water SAP services proposal.61

 

57 UPA § 2.10.

58 UPA § 2.11.

59 Id. 

60 OB, Ex. B (the “Disclosure Schedules”) §§ 2.11(f), (r). 

61 Compl. ¶ 6.
14

In Section 2.20, Sellers represent that the Disclosure Schedules

(at Section 2.20(a)) list the Company’s twenty largest customers.62 They further 

represent that, “[o]ther than as set forth on Section[] 2.20(a) [] of the Disclosure 

Schedule, none of the customers listed on Section 2.20(a) of the Disclosure 

Schedule . . . [has] to the Company’s Knowledge, threatened in writing to cancel, 

terminate, adversely modify or decrease [] in any material respect, its commercial 

relationship with the Company.”63 Section 2.20(a) of the Disclosure Schedules

identifies Yeti as one of the Company’s largest customers.64 It further lists Yeti as 

downgrading its service by $4,665 per month, far less than the $40,000+ per month 

reduction Yeti had specifically demanded.65

In Section 7.2, Sellers commit to indemnify Buyer for any breach of a 

representation or warranty.66 Section 7.5(a), however, limits Sellers’ 

indemnification obligations for any breach to a maximum of $7.5 million.67 While 

 

62 UPA § 2.20. 

63 Id. 

64 Disclosure Schedules § 2.20. 

65 Id.; Compl. ¶ 44.

66 UPA § 7.2. 

67 UPA § 7.5(a). 
15

indemnification is listed as the sole remedy for breaches of the UPA, there is an 

exception for claims of fraud.

68

 There is no cap on recovery for fraud.69

The UPA contains a Delaware choice of law provision and an exclusive

Delaware forum selection provision.70 In a related case, I held that the UPA’s forum 

selection provision requires Plaintiffs to litigate all of their claims in this court.

71

 

G. Procedural History

Plaintiffs originally filed suit in the United States District Court for the 

Western District of Texas.

72

 They voluntarily dismissed that case and refiled in 

Texas state court.73 On June 14, 2019, Defendants filed suit in this court to enforce 

the UPA’s Delaware forum selection provision and enjoin Plaintiffs from 

prosecuting their claims in Texas. After this Court entered a preliminary antisuit 

injunction, Plaintiffs filed their Complaint in this court on September 5, 2019.74

 

68 UPA § 7.13. 

69 UPA § 7.5(b). 

70 UPA § 13.8. 

71 Brown Robin Capital v. The Anschutz Corp., C.A. No. 2019-0456-JRS (Del. Ch. 

Aug. 14, 2019) (TRANSCRIPT) (D.I. 41). 

72 See Pls.’ Answering Br. in Opp’n to Defs.’ Mot. to Dismiss (“AB”), Ex. A.

73 See AB, Ex. B. 

74 Brown Robin, C.A. No. 2019-0456-JRS, at *59; D.I. 1. 
16

Plaintiffs’ Complaint comprises thirteen counts, each arising from alleged 

misrepresentations concerning Yeti, the Salesforce pipeline or the interim financial 

statements.75 Count I claims Sellers breached the UPA because representations 

included in Sections 2.6, 2.10, 2.11 and 2.20 are false, and Sellers have failed to 

indemnify Buyers for these breaches; Count II alleges a fraudulent and intentional 

breach of contract;

76 Count III alleges the OnRamp Insiders committed common law 

fraud; Count IV alleges the OnRamp Insiders conspired to commit fraud; Count V 

alleges the OnRamp Insiders aided and abetted each other’s fraud; Count VI alleges 

the OnRamp Insiders fraudulently induced Plaintiffs to acquire OnRamp; Count VII 

pleads constructive fraud, although Plaintiffs have withdrawn this claim;

77 Count 

VIII pleads unjust enrichment against all Defendants; Count IX pleads conversion 

against the OnRamp Insiders; Count X alleges the OnRamp Insiders violated 

Colorado’s civil theft statute; Count XI alleges the OnRamp Insiders violated the 

Colorado Securities Act; Count XII alleges the OnRamp Insiders violated the Texas 

 

75 Compl. ¶¶ 81–168. 

76 Plaintiffs did not oppose Defendants’ Motion to Dismiss their “intentional [or fraudulent] 

breach” claim in their answering brief or at oral argument. Accordingly, that claim must 

be dismissed. Seagraves v. Urstadt Prop. Co., 1996 WL 159626, at *5 (Del. Ch. Apr. 1, 

1996) (finding that plaintiff’s failure to oppose the defendant’s motion to dismiss certain 

claims “merits dismissal” of those claims). 

77 AB 45 n.6. 
17

Securities Act; and Count XIII alleges the OnRamp Insiders violated the Texas civil

fraud statute.78

Defendants have moved to dismiss each of Plaintiffs’ claims under Chancery 

Rule 12(b)(6). In support of the Motion, they argue: (1) claims asserted by Anschutz 

must be dismissed because Anschutz lacks standing;

79 (2) the Colorado and Texas 

statutory claims must be dismissed because Delaware law applies to all of Plaintiffs’ 

claims;80 (3) the breach of contract claims must be dismissed because the documents 

integral to the Complaint reveal that each of the representations included in Section 2 

of the UPA were true at closing, and everything required to be disclosed was 

included in the Disclosure Schedules;

81 (4) the fraud claims must be dismissed 

because they are impermissibly bootstrapped to contract claims, they are barred by 

the UPA’s anti-reliance provisions and they are not pled with the particularity 

required by Court of Chancery Rule 9(b);82 (5) the conspiracy and aiding and 

abetting claims must be dismissed because the underlying fraud claims fail or, in the 

 

78 Compl. ¶¶ 81–168. The Texas statutory claims are pled in the alternative to the Colorado 

claims in the event this Court concludes Texas law, not Colorado or Delaware law, applies. 

Compl. ¶¶ 153, 161. 

79 OB 12–14. 

80 OB 14, 43. 

81 OB 18–25. 

82 OB 26–36.
18

alternative, because agents of a single business entity cannot conspire with each 

other or aid and abet other agents in the commission of a tort;

83 (6) the unjust 

enrichment claim must be dismissed as duplicative of the breach of contract claims;84 

and (7) the conversion claim must be dismissed because Delaware law is clear that

money cannot be the object of a conversion claim.

85

II. ANALYSIS

The legal standards governing a motion to dismiss for failure to state a claim 

are well-settled. This court will dismiss a complaint under Rule 12(b)(6) if the 

plaintiff would be unable to recover under “any reasonably conceivable set of 

circumstances susceptible of proof” based on facts pled in the complaint.86 When 

applying this standard, “[a]ll well-pleaded factual allegations are accepted as true[,]” 

and “the Court must draw all reasonable inferences in favor of the non-moving 

party. . . .”87

 

83 OB 40–41.

84 OB 42. 

85 OB 42–43. 

86 Gen. Motors, 897 A.2d at 168 (internal quotations omitted). 

87 Savor, Inc. v. FMR Corp., 812 A.2d, 894, 896–97 (Del. 2002) (internal citations omitted). 
19

A. Anschutz Lacks Standing

Defendants begin their multi-pronged attack on the Complaint by arguing that 

Anschutz must be dismissed as a plaintiff because, having suffered no direct injury,

it lacks standing.88 They claim LightEdge, as the sole buyer of OnRamp, is the only 

party that has conceivably suffered a direct injury. Accordingly, if Anschutz wishes 

to recover its losses, it must look to LightEdge for redress.

89 Plaintiffs respond that 

Anschutz wired LightEdge $62 million to finance the purchase, meaning it has 

suffered “a direct injury which [has] result[ed] in actual damages.”90

“Standing is a threshold question that must be answered by a court 

affirmatively to ensure that the litigation before the tribunal is a ‘case or controversy’ 

that is appropriate for the exercise of the court's judicial powers.”91“To establish 

standing, a plaintiff or petitioner must demonstrate first, that he or she sustained an 

‘injury-in-fact’; and second, that the interests he or she seeks to be protected are 

within the zone of interests to be protected.”

92

 

88 OB 13. 

89 Id. 

90 AB 52 (quoting Barkauski v. Indian River Sch. Dist., 951 F. Supp. 519, 542 (D. Del. 

1996). 

91 Dover Historical Soc. v. City of Dover Planning Comm’n, 838 A.2d 1103, 1110 

(Del. 2003). 

92 Id. 
20

The United States District Court for the Southern District of New York

confronted an analogous standing issue in Jackson National Life Insurance Co. v. 

Ligator.

93 There, an investor had provided financing for an intermediary’s 

acquisition of companies controlled by the seller defendants.94 After closing, both

the investor and the buyer sued, claiming the sellers’ misrepresentations propped up 

an artificially inflated purchase price.95 As is the case here, both the investor and the 

buyer’s claims rested on “the same legal theories.”96 Agreeing with the sellers that 

the investor lacked standing to sue, the court held that only the buyer was directly 

injured by the sellers’ alleged misconduct, and that the investor had suffered no 

injury distinct from the injury suffered by the buyer.

97

I endorse Ligator’s analysis and apply it here. Anschutz’s only claimed injury 

is that it helped fund LightEdge’s purchase of a company whose value was 

 

93 949 F. Supp. 200 (S.D.N.Y. 1996). While Ligator is a federal case applying federal 

standing law, “[t]his Court has recognized that the [] requirements for establishing standing 

under Article III to bring an action in federal court are generally the same as the standards 

for determining standing to bring a case or controversy within the courts of Delaware.” 

Dover Historical Soc., 838 A.2d at 1110. 

94 Ligator, 949 F. Supp. at 201. 

95 Id. at 203.

96 Id. 

97 Id. at 205. 
21

artificially inflated as a result of Sellers’ misrepresentations.98 Plaintiffs cannot

dispute that LightEdge, not Anschutz, actually acquired OnRamp. Anschutz thus

finds itself positioned identically with the investor in Ligator; it has suffered no 

injury distinct from the Buyer’s, and therefore lacks standing.99 As an indirectly 

injured party, Anschutz must pursue its share of any recovery LightEdge might 

achieve directly from its subsidiary.100

B. Delaware Law Governs Plaintiffs’ Claims 

As noted, Buyer has asserted claims for fraud and securities violations based 

on Texas and Colorado statutes. The OnRamp Insiders move to dismiss those claims 

on the ground that Delaware law applies to all aspects of the parties’ dispute.101 

In support of this position, they point to the Delaware choice of law provision in the

UPA and this Court’s August 2019 Transcript Ruling holding that the UPA’s 

similarly phrased Delaware forum selection provision applied to all of Plaintiffs’ 

claims, including their extra-contractual claims.102 Buyer respondsthat, by its terms, 

 

98 Compl. ¶ 2. 

99 Ligator, 949 F. Supp. at 204. 

100 Having found Anschutz lacks standing, the rest of this Opinion will only refer to 

“Buyer’s” claims. 

101 OB 14, 43. 

102 See OB 14–15; Brown Robin Capital, LLC v. The Anschutz Corp., C.A. No. 2019-0456-

JRS, D.I. 41, Transcript at 62.
22

the choice of law provision applies only to the construction and interpretation of the 

UPA, and therefore its other common law and statutory claims are not subject to the 

provision.103

Delaware respects and generally enforces contracting parties’ selection of a 

particular state’s law to govern their disputes.104 In line with this policy, the 

Delaware General Assembly passed 6 Del. C. § 2708, which requires courts to 

presume that, where parties have chosen Delaware law in their contract, the 

transaction memorialized in the contract has a material relationship with our state.105

The question, then, is whether a choice of law provision governing 

construction and interpretation of the UPA also applies to Buyer’s extra-contractual 

claims. Then Vice Chancellor Strine confronted this very question when construing 

a nearly identical choice of law provision in his seminal Abry Partners decision.

106

 

103 AB 49–51. 

104 See J.S. Alberici Const. Co., Inc. v. Mid-West Conveyor Co., Inc., 750 A.2d 518, 520 

(Del. 2000) (“Delaware courts will generally honor a contractually-designated choice of 

law provision so long as the jurisdiction selected bears some material relationship to the 

transaction.”). 

105 6 Del. C. § 2708(a). The $100,000 monetary floor required for the law to apply is easily 

cleared here. Compl. ¶ 2. 

106 Abry P’rs V, L.P. v. F & W Acquisition LLC, 891 A.2d 1032, 1046 (Del. Ch. 2006). 

The provision in Abry stated, “[t]his Agreement shall be governed by, and construed in 

accordance with, the Laws of the State of Delaware, regardless of the Laws that might 

otherwise govern under applicable principles of conflicts of law.” Id. The provision at 

issue here states, “[t]his Agreement, and the Transaction Documents shall be exclusively 

construed and interpreted according to the Laws of the State of Delaware, without regard 
23

In holding the contract’s choice of law provision governed the Abry plaintiff’s extracontractual claims, including fraud, he wrote: 

Parties operating in interstate and international commerce seek, by a 

choice of law provision, certainty as to the rules that govern their 

relationship. To hold that their choice is only effective as to the 

determination of contract claims, but not as to tort claims seeking to 

rescind the contract on grounds of misrepresentation, would create 

uncertainty of precisely the kind that the parties’ choice of law 

provision sought to avoid. In this regard, it is also notable that the 

relationship between contract and tort law regarding the avoidance of 

contracts on grounds of misrepresentation is an exceedingly complex 

and unwieldy one, even within the law of single jurisdictions. To layer 

the tort law of one state on the contract law of another state compounds 

that complexity and makes the outcome of disputes less predictable, the 

type of eventuality that a sound commercial law should not seek to 

promote.107

This logic is persuasive and I apply it here. Like Abry, the fraud claims in this case 

are entangled at a granular level with the operative contract’s allocation of risk.108

The conduct giving rise to the breach of contract claims is, with one potential

exception,109 identical to the conduct giving rise to the fraud claims.110 Additionally, 

unlike Abry, this case involves a separate disagreement between the parties about 

 

to its conflict of law provisions which would require the application of the Laws of a state 

other than Delaware . . . .” Agreement § 13.8 As stated, the provisions are nearly identical.

107 Abry, 891 A.2d at 1048. 

108 Id. at 1048–49. 

109 I will address Buyer’s sole basis to claim fraudulent inducement later in this Opinion. 

110 Compl. ¶¶ 6–13.
24

whether the UPA contains unambiguous anti-reliance language that would bar extracontractual fraud claims.111

 To try to parse out what exactly should be decided under 

Delaware law and what falls under another state’s law (e.g., Texas, Colorado or some 

combination of both) would be a foolhardy endeavor almost certain to result in the 

kind of confusion contractual choice of law provisions are meant to avoid.112

Buyer has pointed to two cases it claims cast doubt on Abry’s holding.113 

In the first, the United States District Court for the District of Delaware found that a 

narrow choice of law provision incorporated by reference into a bond instrument did 

not apply to an action challenging the defendants’ alleged bad faith conduct.114 

 

111 Abry, 891 A.2d at 1035 (noting the plaintiff did not contest that there was an antireliance clause). Infra II.D.1. 

112 Abry, 891 A.2d at 1048. 

113 Buyer has not pointed to any decision of our Supreme Court questioning the holding in

Abry. And Abry’s approach has been endorsed consistently by this court and our sister 

court. See, e.g., Transdigm Inc. v. Alcoa Glob. Fasteners, Inc., 2013 WL 2326881, at *5 

(Del. Ch. May 29, 2013) (“Nevertheless, the Court in Abry concluded that the Restatement 

(Second) Section 201 provides the appropriate framework for determining the law 

applicable to claims for fraud in the inducement and fraudulent misrepresentation. Under 

this framework, the Court found that it should apply the law the parties chose to govern 

contractual rights and duties ‘unless the chosen state lacks a substantial relationship to the 

parties or transaction or applying the law of the chosen state will offend a fundamental 

policy of a state with a material greater interest.’ I agree. Therefore, I conclude that 

Delaware law governs the issues raised by Counts II–V of Alcoa’s Counterclaim.”); 

Standard Gen., LP v. Charney, 2017 WL 6498063, at *9 (Del. Ch. Dec. 19, 2017) (quoting 

Abry’s choice of law analysis with approval); Change Capital P’rs Fund I, LLC v. 

Volt Elec. Sys., LLC, 2018 WL 1635006, at *9 (Del. Super. Ct. Apr. 3, 2018) (same). 

114 VSI Sales, LLC v. Int’l Fidelity Ins. Co., 2015 WL 5568623, at *1–3 (D. Del. Sept. 22, 

2015). 
25

It then applied the “most significant relationship” test to determine choice of law.115 

The district court acknowledged in a footnote that Abry applied a different analysis, 

but nowhere did the court cast doubt on Abry’s holding; the court simply came to a 

different result on a different factual record.116 Buyer’s second case involved a 

 

115 Id. at *4. 

116 Id. at *3 n.5. 

Remainder of Page Intentionally Left Blank
26

Delaware court applying English law in its choice of law analysis and is obviously 

distinguishable.117 As Delaware law applies to all of Buyer’s claims, Counts X–XII, 

the Texas and Colorado statutory claims, must be dismissed.118

 

117 Vichi v. Koninklijke Philips Elecs., N.V., 85 A.3d 725, 766 (Del. Ch. 2014). 

Additionally, even assuming the choice of law provision in the contract would not apply to 

the tort claims, Delaware law would still likely govern those claims. Delaware follows the 

Restatement (Second) of Conflict of Laws when analyzing choice of law for tort claims. 

Travelers Indem. Co. v. Lake, 594 A.2d 38, 46–47 (Del. 1991). At bottom, the Restatement 

paradigm asks which state has “the most significant relationship” to the underlying conduct 

giving rise to the claim. RESTATEMENT (SECOND)CONFLICT OF LAWS § 145 (2019). When 

engaged in this inquiry, this court considers four factors: (1) the place of injury; (2) the 

place where the conduct causing the injury occurred; (3) the domicile or place of 

incorporation and place of business of the parties; and (4) the place where the relationship 

of the parties is centered. Travelers, 594 A.2d at 47. Anschutz, LightEdge and Brown 

Robin all have chosen to domicile in Delaware. Compl. ¶¶ 15–16; UPA 1. The individual 

parties in this case are domiciled in Texas, and the business organizations have their 

headquarters in Texas, Colorado and Iowa. Compl. ¶¶ 14–25. The alleged injury here 

occurred in both Texas and Colorado. See Compl. ¶ 2. The conduct causing the injury

occurred in Texas. Compl. ¶¶ 1, 20–25. The relationship among the parties is grounded 

by contract in Delaware, and by conduct in Texas, Colorado and Iowa. UPA § 13.8; 

Compl. ¶¶ 14–25. Given that both Plaintiff entities and Brown Robin are Delaware entities 

and the parties chose Delaware law to govern construction of the UPA, which necessarily 

interacts with the tort claims, and no other state has a straightforward claim to the most 

significant relationship to the dispute, it seems likely Delaware has the most significant 

relationship to the tort claims even if the choice of law provision would not directly reach 

them. 

118 See Vichi, 85 A.3d at 772 (finding that where English law did not apply, a party could 

not invoke an English statute). 
27

C. Breach of Contract 

A plaintiff pleading breach of contract must allege: (1) the existence of a 

contract; (2) the breach of a contractual obligation; and (3) resulting damages.119

Sellers do not dispute that the first element (the existence of a binding contract) has 

been well-pled, and only challenge the third element (resulting damages) with 

respect to the breach claim relating to the allegedly falsified pipeline data.

120

 The 

primary issue, then, concerns the second element—whether Sellers breached the 

UPA. 

This court may address issues surrounding “the proper interpretation of 

language in a contract” on a motion to dismiss only “[w]hen the language of [the] 

contract is plain and unambiguous . . . .”

121

 Contract language is ambiguous “when 

the provisions in controversy are reasonably or fairly susceptible of different 

interpretations or may have two or more different meanings.”122 Dismissal of a 

plaintiff’s breach of contract claim, therefore, is appropriate only when a defendant 

has offered the singular reasonable construction of the operative language as a matter 

 

119 Pharm. Prod. Dev., Inc. v. TVM Life Sci. Ventures VI, L.P., 2011 WL 549163, at *2 

(Del. Ch. Feb. 16, 2011).

120 OB 23. 

121 Allied Capital Corp. v. GC-Sun Hldgs., L.P., 910 A.2d 1020, 1030 (Del. Ch. 2006).

122 AT&T Corp. v. Lillis, 953 A.2d 241, 252 (Del. 2008) (quotations omitted). 
28

of law, and that construction reveals there has been no breach.123 If the plaintiff has 

proffered a reasonable construction that supports its allegation of breach, dismissal 

must be denied.124

The Complaint alleges three separate breaches of the UPA by Sellers: (1) the 

failure to disclose Yeti’s planned service downgrades in violation of Sections 2.10, 

2.11 and 2.20;

125 (2) the manipulation of Salesforce pipeline data in violation of 

Sections 2.6 and 2.10;

126 and (3) the disclosure of false interim financial statements 

in violation of Section 2.6.127 I address each alleged breach in turn.

1. The Yeti Service Downgrades 

Section 2.11 of the UPA represents that, “[o]ther than in the ordinary course 

of business consistent with past practices, the Company is not participating in any 

discussions or negotiations regarding any material modification of, or any material 

amendment to, any Material Contract . . . .”128 Section 2.11 of the Disclosure 

 

123 Caspian Alpha Long Credit Fund, L.P. v. GS Mezzanine P’rs 2006, L.P., 93 A.3d 1203, 

1205 (Del. 2014).

124 Id. 

125 Compl. ¶¶ 34–51. 

126 Compl. ¶¶ 52–74. 

127 Compl. ¶¶ 75–80. 

128 UPA § 2.11(r). 
29

Schedules lists the Yeti service agreement as a Material Contract.129 That Section

further discloses that the Company is “[i]n discussions about a large potential 

upgrade related to Yeti’s migration to a new ERP platform; as part of that there could 

be additional downgrades along the way, but the upside far outweighs the potential 

downgrades.”130

Neither party contends Section 2.11 is ambiguous, and for good reason. The 

provision is clear on its face. Instead, Sellers seek dismissal of this breach claim 

because it is clear from the Complaint, and properly incorporated documents, that 

Sellers did not falsely disclose the state of Yeti’s relationship with the Company as 

Sellers believed, in good faith, that a potential SAP services upgrade for Yeti would 

more than offset Yeti’s proposed cuts.131 Thus, Sellers argue, Buyer has not pled a 

reasonably conceivable breach of contract. 

I disagree. Yeti is alleged to have requested significant reductions in its usage 

of OnRamp’s services on multiple occasions, including an April 23, 2018 email 

specifically detailing in excess of $40,000 in demanded monthly recurring revenue

cuts.

132 Buyer has well pled that this undisclosed request falls within Section 2.11’s 

 

129 Disclosure Schedules § 2.11(f). 

130 Disclosure Schedules § 2.11(r).

131 OB 19–20. 

132 Compl. ¶ 44. 
30

requirement that Sellers disclose “discussions or negotiations regarding any material 

modification of” a Material Contract.133 Sellers may ultimately be able to prove

these cuts were reasonably anticipated to have been offset by the SAP upgrade, and 

that the Disclosure Schedules were, therefore, accurate. But that is not what Buyer 

has pled. Instead, the Complaint alleges the potential SAP upgrade was, at best, 

speculative, while the proposed cuts were actually demanded (in writing) and 

imminently forthcoming.134 That is sufficient to plead a reasonably conceivable 

breach of the UPA.

Additionally, Buyer has pled that Yeti’s demanded downgrade had no 

connection to any proposed SAP upgrade.135 Yet the UPA’s Disclosure Schedules

state, “as part of that [upgrade] there could be additional downgrades . . . .”

136 This 

statement suggests that any proposed cuts will be linked directly to a potential 

upgrade. Even if Sellers could argue at this pleading stage that Schedule 2.11(r) put 

Buyer on notice that Yeti was planning significant cuts, a dubious proposition in the 

context of the Complaint’s well-pled facts, the Seller’s overt attempt explicitly to 

link these cuts to a potential upgrade they knew “was not even in the kitchen, let 

 

133 UPA § 2.11(r). 

134 Compl. ¶¶ 42, 47, 58–59. 

135 Compl. ¶ 46.

136 Disclosure Schedules § 2.11(r). 
31

alone on the back burner[,]” is conceivably in conflict with the representation in 

Section 2.11.

137

 As Buyer has adequately pled that the disclosures in 

Schedule 2.11(r) are false, it follows that it has well-pled the representation in 

Section 2.11 is also false. 

Turning to Section 2.20, Sellers represent there that, except as disclosed in

Section 2.20(a) of the Disclosure Schedules, none of OnRamp’s twenty largest 

customers has “threatened in writing to cancel, terminate, adversely modify or 

decrease, in each case, in any material respect, its commercial relationship with the 

Company.”138 Section 2.20 of the Disclosure Schedules lists Yeti as reducing its 

monthly recurring revenue by $4,665, but makes no mention of the roughly $40,000 

in monthly cuts Yeti had already threatened.

139

 

Again, the parties have not argued this provision is ambiguous, and again, the 

concession is well placed. The clear language of Section 2.20 would require Sellers

to disclose that Yeti was threatening (in writing) substantial service reductions.140 

Yeti is alleged to have notified the OnRamp Insiders on multiple occasions, in 

writing, that it was intent on implementing major cost cuts, including making a

 

137 Compl. ¶ 42. 

138 UPA § 2.20.

139 Disclosure Schedules § 2.20(a). 

140 UPA § 2.20. 
32

detailed written request for approximately $40,000 in monthly recurring revenue

cuts.141 These pled facts easily satisfy Buyer’s burden of stating a reasonably 

conceivable breach of contract claim with respect to Section 2.20.142

Buyer alleges the failure to disclose the anticipated Yeti cuts also breached 

Section 2.10. Here, in my view, Buyer’s pleading falls short. As an initial matter, 

Section 2.10 requires disclosure only when a customer has “terminated or amended 

in any material respect any Material Contract . . . .”143 As of closing, Yeti had not 

yet amended its contract with OnRamp to implement its desired cost cuts; that 

amendment did not occur until September 2018, months after the Acquisition 

closed.

144

In an effort to plead around this reality, Buyer focuses on the language in 

Section 2.10 requiring OnRamp to operate “in the ordinary course of business 

consistent with past practices.”

145

 Buyer alleges this covenant was breached because 

Sellers resisted implementing Yeti’s desired downgrades, presumably to avoid 

 

141 Compl. ¶¶ 39, 43–45. 

142 Perhaps recognizing the strength of Buyer’s arguments, Sellers only passingly 

addressed Section 2.20 in their briefs. 

143 UPA § 2.10(l). 

144 Compl. ¶ 46. 

145 UPA § 2.10.
33

having to disclose them.

146 The Complaint does not plead, however, that fighting to 

keep a customer was somehow out of OnRamp’s ordinary course of business. Buyer 

has failed to plead, therefore, that Sellers failing to disclose Yeti’s planned service 

downgrades conceivably breached Section 2.10’s “ordinary course” covenant.

2. The Salesforce Pipeline Data

Buyer alleges Sellers breached Sections 2.6 and 2.10 of the UPA by falsifying 

the Company’s Salesforce pipeline data.147 Specifically, it says the representations 

in Sections 2.6 and 2.10 were rendered false when Sellers knowingly inserted

fanciful sales data into the pipeline in response to Buyer’s inquiries about future 

sales prospects.148 Sellers vigorously deny Buyer’s factual allegations, but argue, 

even accepting those allegations as true, that no representation in the UPA was 

breached because the Salesforce pipeline data is not covered by any representation 

in the UPA.

149

In Section 2.6, Sellers represent that OnRamp’s financial statements are 

accurate and “[t]he books and records of the Company have been maintained in 

accordance with good business practices, reflect only valid transactions and are 

 

146 AB 29–30. 

147 Compl. ¶¶ 52–74. 

148 AB 30–32. 

149 OB 20–23. 
34

complete and correct in all material respects.”150 The parties disagree on the 

meaning and scope of Section 2.6. Buyer argues the Salesforce pipeline is captured 

by the “books and records” language in the representation.151 Sellers respond that 

the context in which this language appears in the UPA indicates it refers only to 

“financial books and records,” and that Buyer’s construction is overly broad.152

Both parties have offered reasonable constructions of Section 2.6. Buyer is

correct that the provision clearly states “books and records,” not “financial books 

and records,” and thus is broader than the construction Sellers have proffered.153 

Sellers were free, after all, to bargain for a narrower provision.154 If Salesforce 

pipeline data is covered by the phrase “books and records,” then it is reasonably 

conceivable that knowingly inserting falsified data in the pipeline data disclosed to 

Buyer would render the representation in Section 2.6 false. 

Sellers convincingly note, however, that Section 2.6 also represents that the 

books and records “reflect only valid transactions[,]” suggesting that the Salesforce 

 

150 UPA § 2.6(a). 

151 AB 31–32. 

152 Oral Arg. on Defs.’ Mot. to Dismiss (“OA”) 13.

153 UPA § 2.6(a). 

154 Nemec v. Shrader, 991 A.2d 1120, 1126 (Del. 2010) (holding that Delaware courts may 

not “rewrite the contract to appease a party who later wishes to rewrite a contract he now 

believes to have been a bad deal.”).
35

data, which reflects only “prospective transactions,” falls outside of the 

representation.155 Because both sides have offered reasonable constructions of 

Section 2.6, the provision is ambiguous, and Defendants’ Motion to Dismiss must 

be denied.156

Buyer next alleges that Section 2.10’s representation that the Company had 

conducted its business in the ordinary course during the Acquisition negotiations is 

false in light of the alleged pipeline manipulation.157 The parties also dispute the 

scope of this representation. “This Court has previously interpreted the contractual 

term ‘ordinary course’ to mean the normal and ordinary routine of conducting 

business.”

158

 These representations are common in transaction agreements and are 

included to reassure a buyer that the target company has not materially changed its 

business or business practices during the pendency of the transaction.159 

 

155 OA 15. 

156 Caspian, 93 A.3d 1205. See also Calesa Assocs., LP v. Am. Capital, Ltd., 2018 

WL 4026976, at *1 (Del. Ch. Aug. 22, 2018) (noting that the court is not to choose which 

of two reasonable constructions is more reasonable before considering extrinsic evidence). 

157 AB 30.

158 Cooper Tire & Rubber Co. v. Apollo (Mauritius) Hldgs. Pvt. Ltd., 2014 WL 5654305, 

at *13 (Del. Ch. Oct. 31, 2014) (quotation omitted). 

159 See Akorn, Inc. v. Fresenius Kabi AG., 2018 WL 4719347, at *83 (Del. Ch. Oct. 1, 

2018), aff’d, 198 A.3d 724 (Del. 2018) (TABLE). 
36

Vice Chancellor Laster offered a thoughtful exegesis of the typical “ordinary 

course covenant” in Akorn, Inc. v. Fresenius Kabi AG.

160

 There, he found 

(after trial) that a target company violated the covenant post-signing by fabricating 

clinical trial data that was reported to the FDA, cancelling its regular audits and 

failing to investigate credible whistleblower allegations.

161

 Other decisions of this 

court are in accord, finding that ordinary course representations either were actually 

violated or were well-pled to have been violated when: seller’s employees 

manipulated financial records in deviation from its past accounting practices;

a company substantially restructured its business; and employees of a company 

schemed to start a competing business and redirected assets to that competing 

business during the pendency of a transaction.

162

It is reasonably conceivable that manipulating pipeline data in May, 2018, as 

a means to quiet the concerns of an anxious buyer, is not conduct undertaken “in the 

ordinary course of business consistent with past practices.”163 Sellers, therefore, 

 

160 Id. at *83–93. While Akorn involved an ordinary course covenant, and this case 

involves an ordinary course representation, the distinction does not impact my analysis. 

161 Id. at *88–89. 

162 See ChyronHego Corp. v. Wight, 2018 WL 3642132, at *8 (Del. Ch. July 31, 2018);

Osram Sylvania Inc. v. Townsend Ventures, LLC, 2013 WL 6199554, at *7 (Del. Ch. 

Nov. 19, 2013); Ivize of Milwaukee, LLC v. Complex Litig. Supp., LLC, 2009 WL 1111179, 

at *1 (Del. Ch. Apr. 7, 2009).

163 Compl. ¶ 57; UPA § 2.10.
37

conceivably breached Section 2.10’s representation that no such deviations from the 

“ordinary course of business” had occurred since December 31, 2017.

Sellers’ final attempt to defeat the Salesforce pipeline data breach claim rests 

on Buyer’s purported failure to plead damages causally linked to the breach.164

In this regard, they note Buyer initially offered $106 million for the Company on 

May 18, 2018, before the allegedly fabricated sales pipeline data was transmitted.

165

 

As Buyer calculated the purchase price before viewing the misleading pipeline data, 

Sellers argue Buyer cannot plead or prove causal damages.166 

Sellers overstate Buyer’s burden. To survive a dispositive motion on a breach 

of contract claim, it is enough that a plaintiff “takes the causation of damages out of 

the area of speculation; it is not necessary to show with absolute certainty that 

defendant’s action caused plaintiff’s harm.”167 Buyer pleads that the Spiceworks 

cancellation and disappointing April sales data caused it to reconsider the 

Acquisition.168 It alleges that the millions of dollars in annual sales opportunities 

 

164 OB 23. 

165 Id. 

166 Id. 

167 LaPoint v. AmerisourceBergen Corp., 2007 WL 1309398, at *7 (Del. Ch. May 1, 2007) 

(aff’d, 956 A.2d 642 (Del. 2008) (TABLE)). 

168 Compl. ¶¶ 55–57. 
38

added to the Salesforce pipeline were key to inducing it to move forward at the 

previously agreed upon price and eventually close.169 This is more than sufficient to 

“take[] the causation damages out of the area of speculation,” and meet Buyer’s

notice pleading burden at the Rule 12(b)(6) stage.170

3. The Interim Financial Statements 

Buyer alleges Sellers breached Section 2.6 of the UPA by including revenue 

and accounts receivable in the interim financial statements that they knew were 

uncollectible.171 Section 2.6 represents that, “[t]he Audited Financial Statements 

and the Interim Financial Statements present fairly and accurately, in all material 

respects, the financial position of the Company . . . in accordance with 

GAAP . . . .”172

Buyer identifies numerous allegedly misleading entries in the interim 

financial statements.

173

 In particular, it argues the interim statements included 

revenue and account receivables from Pure Healthy Back, Inc., Keona Health, Inc. 

and XOR Data Exchange LLC, even though those customers had either disconnected 

 

169 Id. 

170 LaPoint, 2007 WL 1309398, at *7. 

171 Compl. ¶ 76. 

172 UPA § 2.6. 

173 Compl. ¶¶ 76–79. 
39

all OnRamp services months earlier, were shutting down operations or were 

otherwise unwilling or unable to settle their accounts.174 Sellers respond that Buyer 

has not well-pled a breach of Section 2.6 because it did not identify which GAAP 

standard was breached in the Complaint, and Sellers did not otherwise warrant all 

accounts receivable would, in fact, be collected.

175

The notion that Buyer was required to plead exactly which GAAP standard 

was violated by Sellers in order to state a breach of contract claim based on a 

representation that interim financial statements were prepared in accordance with 

GAAP finds no support in our case law and runs contrary to notice pleading as 

codified in Chancery Rule 8(a). That rule requires only a short statement putting 

Defendants on notice of the claims against them.176 As the Complaint alleged the 

interim financial statements did not comply with GAAP, in violation of Section 2.6 

of the UPA, Sellers have been put on fair notice of the claim against them. For now, 

 

174 Compl. ¶¶ 78–79. 

175 OB 24–25. 

176 Ct. Ch. R. 8(a); VLIW Tech., LLC v. Hewlett-Packard Co., 840 A.2d 606, 611 

(Del. 2003) (“Such a statement must only give the defendant fair notice of a claim and is 

to be liberally construed.”); Michelson v. Duncan, 407 A.2d 211, 217 (Del. 1979) 

(“A complaint in a civil action need only give defendant fair notice of a claim and is to be 

liberally construed.”). 
40

that is all that is required.177 If GAAP does not support the claim, Buyer will fail in 

its burden to prove it.

D. Fraud and Fraudulent Inducement

Buyer’s fraud claims take two forms. First, it alleges the same course of 

conduct underlying its breach of contract claims also gives rise to actionable fraud 

claims.178 Separately, it alleges the OnRamp Insiders made extra-contractual 

misrepresentations that fraudulently induced it to sign the UPA and acquire

OnRamp.179

The OnRamp Insiders argue the fraud claims should be dismissed for three 

reasons. First, they argue that any fraud claims premised on extra-contractual 

representations are precluded by the UPA’s anti-reliance language.180 Next, they

maintain the fraud claims based on contractual misrepresentations are impermissibly 

bootstrapped breach of contract claims.181 Last, they argue the elements of fraud 

 

177 Compl. ¶¶ 75–80. 

178 Compl. ¶¶ 94–99. 

179 Compl. ¶¶ 110–115. 

180 OB 29–30. 

181 OB 26–28. 
41

have not pled with the particularity required by Court of Chancery Rule 9(b).182

I take up the arguments in that order.

1. The Extra-Contractual Misrepresentations 

According to the Complaint, Buyer was fraudulently induced to agree to the 

Acquisition by the OnRamp Insiders’ extra-contractual representations about the 

Company.183 Here, the Complaint focuses on the disclosure of the falsified 

Salesforce data to Buyer as the means by which the OnRamp Insiders brought Buyer 

back to the negotiating table and ultimately induced it to sign the UPA.

184

 

Consistent with our state’s policy of promoting the freedom of contract,

Delaware courts have consistently held that “sophisticated parties to negotiated 

commercial contracts may not reasonably rely on information that they contractually 

agreed did not form a part of the basis for their decision to contract.”185 With this in 

 

182 OB 30–36. 

183 Compl. ¶ 111. 

184 Compl. ¶¶ 111–14. This would only be an extra-contractual representation if this Court 

finds, when adjudicating Buyer’s breach of contract claims, that the UPA does not contain 

a representation relating to the Salesforce data. If, upon offering a definitive construction 

of the contract, this Court finds that either Section 2.06 or Section 2.10 capture the 

Salesforce data, then there would be no extra-contractual representation upon which to 

ground a fraudulent inducement claim. 

185 H-M Wexford LLC v. Encorp, Inc., 832 A.2d 129, 142 n.18 (Del. Ch. 2003); see also 

RAA Mgmt., LLC v. Savage Sports Hldgs., Inc., 45 A.3d 107, 118–19 (Del. 2012) 

(“Abry Partners accurately states Delaware law and explains Delaware’s public policy in 

favor of enforcing contractually binding written disclaimers of reliance on representations 

outside of a final agreement of sale or merger.” ); ev3, Inc. v. Lesh, 114 A.3d 527, 529 n.3 
42

mind, this court does not hesitate to dismiss fraud claims premised on extracontractual representations when the parties’ contract contains an unambiguous 

mutual covenant that neither party relied upon extra-contractual promises in 

connection with the transaction.186 But the anti-reliance language must be explicit 

and comprehensive, meaning the parties must “forthrightly affirm that they are not 

relying upon any representation or statement of fact not contained [in the 

contract].”

187 A standard integration clause, without more, is insufficient to disclaim 

all reliance on extra-contractual statements.188

The OnRamp Insiders point to three provisions they claim, in total, amount to 

unambiguous anti-reliance language. First, Section 2.23 of the UPA states, “[e]xcept 

for the representations and warranties contained in this Article II . . . none of the 

Company nor any Person on behalf of the Company makes any other express or 

 

(Del. 2014) (“Delaware courts seek to ensure freedom of contract and promote clarity in 

the law in order to facilitate commerce.”). 

186 Abry, 891 A.2d at 1057; Kronenberg v. Katz, 872 A.2d 568, 588 (Del. Ch. 2004). This 

language may be spread over multiple provisions if, in total, it can be read to disclaim 

reliance. See Prairie Capital III, L.P. v. Double E. Hldg. Corp., 132 A.3d 35, 51 (Del. Ch. 

2015) (“Delaware law does not require magic words. In this case, the Exclusive 

Representations Clause and the Integration Clause combine to mean that the Buyer did not 

rely on other information. They add up to a clear anti-reliance clause.”). 

187 Kronenberg, 872 A.2d at 591; see Abry, 891 A.2d at 1059 (“[M]urky integration clauses,

or standard integration clauses without explicit anti-reliance representations, will not 

relieve a party of its oral and extra-contractual fraudulent representations.”). 

188 Id. 
43

implied representation or warranty with respect to the Company, and the Company 

disclaims any other representations or warranties . . . .”189 Second, in Section 4.7,

“Buyer acknowledges and agrees that it has made its own inquiry and investigation 

into, and, based thereon, has formed an independent judgment concerning, the 

Company and its business and operations, and that it has been provided with such 

information about the Company and its business and operations as it has 

requested.”190 Last, the UPA contains a standard integration clause.191

What is notably absent from these provisions is any disclaimer of reliance by 

Buyer. In Heritage Handoff Holdings, LLC v. Fontanella,

192 the court found 

contractual language did not constitute unambiguous anti-reliance language, in large 

part, because the “[p]laintiff did not affirmatively promise not to rely on such [extracontractual] representations.”193

 While our law does not require “magic words” to 

disclaim reliance, when the contract does not actually include a specific 

acknowledgement by a party that it is only relying on information contained within 

 

189 UPA § 2.23. 

190 UPA § 4.7. 

191 See UPA § 13.4 (“This agreement . . . embod[ies] the entire agreement and 

understanding of the Parties hereto with respect to the subject matter hereof, and supersede 

all prior and contemporaneous discussions, agreements and understandings relative to such 

subject matter . . . .”).

192 2019 WL 1056270 (D. Del. Mar. 6, 2019). 

193 Id. at *4. 
44

the four corners of the agreement, that party is not shirking its bargain when it later 

alleges that it did, in fact, rely on extra-contractual representations.194

The cases the OnRamp Insiders rely on to support their argument that the 

language in the UPA amounts to an unambiguous anti-reliance provision are 

distinguishable. In Prairie Capital, the buyer represented that it “understands, 

acknowledges, and agrees” that the seller was disclaiming extra-contractual 

representations.195 In Sparton Corp. v. O’Neil, the buyer agreed to forgo “any claim 

with respect to their purported use of, or reliance on, any such [extra-contractual] 

representations, warranties or statements (including by omission).”

196 As noted, 

Buyer made no comparable promise in the UPA not to rely on extra-contractual 

representations, warranties or statements.

The OnRamp Insiders attempt to distinguish Fontanella by noting the 

agreement in that case had no representation comparable to Section 4.7.197 But 

Section 4.7 does not communicate any anti-reliance commitment, much less an 

 

194 See Abry, 891 A.2d at 1058 (“To fail to enforce non-reliance clauses is not to promote 

a public policy against lying. Rather, it is to excuse a lie made by one contracting party in 

writing—the lie that it was relying only on contractual representations and that no other 

representations had been made—to enable it to prove that another party lied orally or in a 

writing outside the contract’s four corners.”). 

195 Prairie Capital, 132 A.3d at 50. 

196 2017 WL 3421076, at *4 (Del. Ch. Aug. 9, 2017) (emphasis provided). 

197 Defs.’ Reply Br. in Further Supp. of Their Mot. to Dismiss (“RB”) 16. 
45

unambiguous one. While Buyer represents in that provision that it had formed an 

“independent judgment” about the Company, it also states it was “provided with 

[requested] information about the Company and its business and operations” to reach 

that judgment.198 As Buyer notes, this clause reasonably can be read to reflect that 

Buyer was expressly representing it did rely on extra-contractual information.199 

In the absence of an unambiguous anti-reliance provision, it cannot be said as a 

matter of law that Buyer promised in the UPA not to bring its fraudulent inducement 

claim. That claim, for now, survives. 

2. Fraud/Breach of Contract Bootstrapping

The OnRamp Insiders next invoke the rule that fraud claims cannot be 

bootstrapped to breach of contract claims as a separate ground to argue that Buyer’s

 

198 UPA § 4.7 (the provision makes no attempt to identify the information Buyer had been 

given or to describe it as contractual or extra-contractual). 

199 The OnRamp Insiders argue the Agreement in Prairie Capital contains “substantially 

similar language[,]” and this Court should therefore reach the same result as the Prairie 

Capital court. RB 17. But, the provision in Prairie Capital was considerably different. 

It included no language about the buyer being “provided with [] information about the 

Company and its business and operations as it has requested.” UPA § 4.7; see Prairie 

Capital, 132 A.3d at 50. Instead, that provision notes, “[i]n making its determination to 

proceed with the Transaction, the Buyer has relied on (a) the results of its own independent 

investigation and (b) the representations and warranties of the [sellers] expressly and 

specifically set forth in this Agreement, including the Schedules.” Id. Later in that same 

provision, the buyer explicitly acknowledges that it “understands, acknowledges and 

agrees, that all other representations and warranties of any kind . . . are specifically 

disclaimed by the [sellers].” Id. Far from being “substantially similar,” these differences 

make the contract in Prairie Capital inapposite. 
46

fraud claims must be dismissed.

200 Generally stated, “[f]or both a breach-of-contract 

claim and a tort claim to coexist in a single action, the plaintiff must allege that the 

defendant breached a duty that is independent of the duties imposed by the 

contract.”201 Accordingly, “one cannot ‘bootstrap’ a claim of breach of contract into 

a claim of fraud merely by alleging that a contracting party never intended to perform 

its obligations.”202 “In other words, a plaintiff cannot state a claim for fraud simply 

by adding the term ‘fraudulently induced’ to a complaint or alleging that the 

defendant never intended to comply with the agreement at issue at the time the 

parties entered into it.”

203

 

As a general rule, the bootstrapping bar makes perfect sense. When a party 

claims he was fraudulently induced into entering a contract by promises that were 

then included in the negotiated language of that very contract, his remedy should be 

in contract, not tort. Both claims lead to the same destination—a remedy in damages 

causally related to the broken promises.

 

200 OB 26–29.

201 EZLinks Golf, LLC v. PCMS Datafit, Inc., 2017 WL 1312209, at *3 (Del. Super. Ct. 

Mar. 21, 2017) (quotation omitted).

202 Iotex Comm’ns, Inc. v. Defries, 1998 WL 914265, at *4 (Del. Ch. Dec. 21, 1998). 

203 MicroStrategy Inc. v. Acacia Research Corp., 2010 WL 5550455, at *17 (Del. Ch. 

Dec. 30, 2010). 
47

While our courts do not hesitate to dismiss bootstrapped fraud claims, our 

courts also recognize that the bootstrap rule is not absolute. For instance, in Abry,

the court held that where, as here, the plaintiff seeks a remedy for fraud based in 

rescission, or rescissory damages, not compensatory damages, the plaintiff/buyer 

may plead a fraud claim next to a breach of contract claim if he can plead “either: 

(1) that the Seller knew that the Company's contractual representations and 

warranties were false; or (2) that the Seller itself lied to Buyer about a contractual 

representation and warranty.”204

Buyer’s so-called contractual fraud claims fall within the Abry exception. 

Specifically, Buyer alleges the OnRamp Insiders knew the representations included 

in Sections 2.6, 2.10, 2.11 and 2.20 were false, and yet made them anyway.205 And 

Buyer has explicitly prayed for rescission of the UPA to remedy the alleged fraud, a 

remedy the UPA forbids for breach of contract claims.

206

 As the Abry court 

 

204 Abry, 891 A.2d at 1064; see also 3M Co. v. Neology, Inc., 2019 WL 2714832, at *14 

(Del. Super. Ct. June 28, 2019) (holding that fraud claim was not impermissibly 

bootstrapped where plaintiff was seeking rescissory damages, “which are a remedy for 

fraud, not breach of contract”); Firmenich Inc. v. Nat. Flavors, Inc., 2020 WL 1816191, 

at *10 (Del. Super. Ct. Apr. 7, 2020) (noting that “Abry supports the conclusion that a 

contractual limitation on damages opens the door to parallel breach of contract and fraud 

claims.”). 

205 Compl. ¶¶ 47–48, 62, 80, 96.

206 Compl. ¶ 99; UPA § 7.13 (limiting the remedy for breach of the UPA to indemnification 

up to specified caps). 
48

recognized, to hold that Buyer can recover only capped damages for knowingly false 

contractual representations would be to countenance and immunize fraud.207 

3. Chancery Rule 9(b)

To the extent their contract-based and bootstrapping arguments do not carry 

the day, the OnRamp Insiders maintain that Buyer’s fraud claims still must be 

dismissed because they have not been pled with the factual particularity required by 

Court of Chancery Rule 9(b).208 Not surprisingly, Buyer disagrees.

209

The elements of fraud in Delaware are: (1) a false representation of material 

fact or omission of fact that the defendant had a duty to disclose; (2) the defendant 

knew or believed that the representation was false when made or was recklessly 

indifferent to the truth; (3) the defendant intended to induce the plaintiff to act; 

(4) the plaintiff in fact acted in justifiable reliance on the representation; and (5) the 

plaintiff was injured by its reliance.210 Court of Chancery Rule 9(b) requires factual 

 

207 Abry, 891 A.2d at 1064. 

208 OB 32–39; see Del. Ct. Ch. R. 9(b) (“In all averments of fraud or mistake, the 

circumstances constituting fraud or mistake shall be stated with particularity.”). 

209 AB 37–38. 

210 DCV Hldgs., Inc. v. ConAgra, Inc., 889 A.2d 954, 958 (Del. 2005). 
49

allegations in support of four of the five prima facie elements of fraud to be pled 

with particularity.211 Knowledge may be “averred generally.”212 

When evaluating whether a plaintiff who was the direct recipient of an

allegedly fraudulent overture has met his enhanced pleading burden for fraud under 

Rule 9(b), this court has observed that the complaint should specify “(1) the time, 

place, and contents of the false representation; (2) the identity of the person making 

the representation; and (3) what the person intended to gain by making the 

representations.”213 While the failure to plead these so-called “newspaper facts” can 

be excused in circumstances where the plaintiff would have no way to know that 

level of detail in advance of bringing the claim,214 it is reasonable to expect a counter-

 

211 Del. Ct. Ch. R. 9(b).

212 Id. 

213 Abry, 891 A.2d at 1050. 

214 See LVI Gp. Invs., LLC v. NCM Gp. Hldgs, LLC, 2017 WL 1174438, at *4 (Del. Ch. 

Mar. 29, 2017) (noting that a failure to plead newspaper facts will not, as a matter of law, 

be “fatal” to a fraudulent misrepresentation claim); Yavar Rzayev, LLC v. Roffman, 2015 

WL 5167930, at *4 (Del. Super. Ct. Aug. 31, 2015) (“Delaware courts have adopted the 

reasoning of the Third Circuit in [Seville Indus. Mach. Corp. v. Southmost Mach. Corp., 

742 F.2d 786 (3d Cir. 1984)] and consistently found that the date, place, and time 

allegations are not required so long as the pleadings put defendants on notice of the 

misconduct with which they are charged and protect defendants against false charges of 

immoral or fraudulent behavior.); Sammons v. Hartford Underwriters Ins. Co., 

2010 WL 1267222, at *4 (Del. Super. Ct. Apr. 1, 2010) (“an excessive focus on 

particularity . . . could impair the flexibility and the just determination of cases.”). 
50

party in contractual negotiations to be able to back a fraud claim related to the 

contract with detailed factual allegations. 

Buyer has cleared Rule 9(b)’s particularity hurdle here. The Complaint 

identifies how the contractual representations concerning Yeti were false when 

made.215 To support these allegations, it alleges who communicated with Yeti 

employees, who, in turn, communicated the false information regarding Yeti to 

Buyer, when these communications occurred, what was communicated and why the 

OnRamp Insiders were motivated to lie.

216

 Each of these pled facts support the 

allegations that the UPA contained material misstatements, and put the OnRamp 

Insiders on notice of the claims against them.

The same is true for the allegations that the Salesforce pipeline was 

manipulated and the interim financial statements were fraudulent. The Complaint 

specifically alleges who manipulated the Salesforce data, what data was 

manipulated, when the data was changed and why the OnRamp Insiders were 

motivated to lie.

217

 Likewise, the Complaint alleges what accounts were 

uncollectible, when the OnRamp Insiders likely knew those accounts could not be 

collected and why they would, nonetheless, include them as revenue and accounts 

 

215 Compl. ¶¶ 38–49. 

216 Id.

217 Compl. ¶¶ 52–80.
51

receivable on the interim financial statements.218 This is more than enough to put 

the OnRamp Insiders on notice of the specific misconduct with which they are 

charged.219

E. Aiding and Abetting and Conspiracy 

Buyer claims the OnRamp Insiders both aided and abetted each other’s fraud 

and conspired to commit fraud.220 The OnRamp Insiders respond that the aiding and 

abetting and conspiracy claims must be dismissed, even if the underlying fraud 

claims survive, because “officers and agents of a single business entity cannot aid 

and abet or conspire with each other in the commission of a tort.”221 

Whether a corporation can conspire with its subsidiaries, affiliates or agents 

is an area of law that, “both inside and outside of Delaware, is more characterized 

by confusion than clarity.”222 This court has, in the past, offered somewhat mixed 

guidance on the issue. In In re Transamerica Airlines, Inc.223 this court held that

“a corporation generally cannot be deemed to have conspired with its wholly owned

 

218 Id. 

219 Kahn Bros. & Co., Inc. Profit Sharing Plan and Trust v. Fishbach Corp., 1989 

WL 109406, at *4 (Del. Ch. Sept. 14, 1989). 

220 Compl. ¶¶ 100–09. 

221 OB 41. 

222 Allied Capital, 910 A.2d at 1037. 

223 2006 WL 587846 (Del. Ch. Feb. 28, 2006). 
52

subsidiary, or its officers and agents.”224 A few months later, however, in Allied 

Capital, this court declined to hold that, “as a per se matter, commonly-controlled [] 

business entities cannot conspire with one another and be held liable for acting in 

concert to pursue unlawful activity that causes damage.”

225

 

Not surprisingly, Buyer likes Allied Capital. But that case decided the issue 

on facts not present here.226 The plaintiff in Allied Capital alleged a conspiracy 

among a “myriad of [defendant]-controlled affiliates as well as . . . those entities’

directors and officers.”

227

 In rejecting a per se rule that a parent cannot conspire 

with its subsidiaries, the court was motivated, in large part, by a view that such a 

rule would ignore that “our corporation law is largely built on the idea that separate 

legal existence of corporate entities should be respected—even when those separate 

corporate entities are under common ownership and control.”

228

Unlike Allied Capital, Buyer here does not allege a conspiracy among a 

company and its subsidiaries or affiliates; it alleges aiding and abetting and 

 

224 Id. at *6; see also Am. Capital Acquisition P’rs, LLC v. LPL Hldgs., Inc., 2014 

WL 354496, at *12 (Del. Ch. Feb. 3, 2014) (holding that the “general rule that a corporation 

cannot conspire with its wholly-owned subsidiaries and officers must apply.”). 

225 Allied Capital, 910 A.2d at 1037.

226 AB 46. 

227 Allied Capital, 910 A.2d at 1036. 

228 Id. at 1038. 
53

conspiracy only against and among the individual OnRamp Insiders.229 These 

claims, directed at the officers of a limited liability company, do not implicate the 

issues of corporate separateness that caused the Allied Capital court to reject a per se

rule. Buyer’s reliance on Allied Capital is, therefore, misplaced. 

“It is basic in the law of conspiracy that you must have two persons or entities 

to have a conspiracy. A corporation cannot conspire with itself any more than a 

private individual can, and it is the general rule that the acts of the agent are the acts 

of the corporation.”230 Accordingly, it is entirely sensible that, as a general rule, 

agents of a corporation cannot conspire with one another or aid and abet each other’s 

torts.231 The only instance where this general rule will not apply is when a corporate 

officer “steps out of her corporate role and acts pursuant to personal motives.”232 

 

229 Compl. ¶¶ 100–09.

230 Amaysing Techs. Corp. v. Cyberair Commc’ns, Inc., 2005 WL 578972, at *7 (Del. Ch. 

Mar. 3, 2005) (quoting Nelson Radio & Supply Co. v. Motorola, Inc., 200 F. 2d 911, 914 

(5th Cir. 1952)). 

231 See Cornell Glasgow, LLC v. La Grange Props., LLC, 2012 WL 2106945, at *11 

(Del. Super. Ct. June 6, 2012) (“A corporation generally cannot be deemed to have 

conspired with its wholly owned subsidiary, or its officers and agents . . . And, like civil 

conspiracy, officers and agents cannot aid and abet their principal or each other in the 

commission of a tort.”) (quotation omitted).

232 In re Transamerica, 2006 WL 587846, at *6. 
54

The allegations in the Complaint offer no basis to depart from the “basic law 

of conspiracy” or aiding and abetting.

233

 The OnRamp Insiders are alleged to have 

committed fraud to inflate the value of OnRamp or earn a bonus.

234

 A corporate 

officer does not step out of his corporate role unless he “seeks to gain a benefit 

independent of their financial interest resulting from their employment by or 

investment in [their employer].”235 As Buyer has not alleged the OnRamp Insiders 

acted for any reason other than inflating the value of OnRamp for their principal, 

there is no basis to depart from the general rule that “the acts of the agent are the acts 

of the corporation.”236 Buyer’s aiding and abetting and conspiracy claims, therefore, 

must be dismissed.237

 

233 Amaysing Techs., 2005 WL 578972, at *7; see Allied Capital, 910 A.2d at 1038 

(“[O]ur state courts have noted that in cases involving the internal affairs of corporations, 

aiding and abetting claims represent a context-specific application of civil conspiracy 

law.”). 

234 Compl. ¶ 97. 

235 Amaysing Techs., 2005 WL 578972, at *8; see Coulbourne v. Rollins Auto Leasing 

Corp., 392 F. Supp. 1198, 1201 (D. Del. 1975) (finding an employee was not acting for 

personal reasons because “the expectation of a commission is the only basis to distinguish 

him from the corporation . . . .”). 

236 Amaysing Techs., 2005 WL 578972, at *7. 

237 See Cornell Glasgow, 2012 WL 2106945, at *11 (dismissing conspiracy and aiding and 

abetting claims in tandem). 
55

F. Unjust Enrichment

In Count VIII, Buyer alleges each Defendant was unjustly enriched by the 

inflated sales price of OnRamp.238 Defendants respond that the unjust enrichment 

claim must be dismissed because an unjust enrichment claim cannot lie when the 

parties’ relationship is controlled by an enforceable contract.239 Buyer fires back

that its unjust enrichment claim can proceed as an alternative theory of liability 

because the Complaint seeks to rescind the UPA based on fraud.240

Defendants are correct that unjust enrichment claims generally will be 

dismissed as duplicative when there is an enforceable contract that governs a 

relationship.241 But, Buyer here maintains that the underlying contract should be 

rescinded on the basis of fraud.

242

 “Although merely suggesting that the validity of 

a contract may be in doubt is insufficient to support a claim for unjust enrichment, a 

claim that the underlying agreement is subject to rescission due to fraudulent conduct 

 

238 Compl. ¶ 126. 

239 OB 42. 

240 AB 47. 

241 Bakerman v. Sidney Frank Importing Co. Inc., 2006 WL 3927242, at *18 (Del. Ch. 

Oct. 10, 2006) (“When the complaint alleges an express, enforceable contract that controls 

the parties’ relationship, [] a claim for unjust enrichment will be dismissed.”).

242 Compl. ¶ 99.
56

or omissions is sufficient to do so.”243 Having well-pled fraud that might support 

rescission, Buyer’s unjust enrichment claim cannot be dismissed. 

G. Conversion 

Last, Buyer alleges the OnRamp Insiders “converted” the $106 million 

purchase price because they have no right to that money.244 On its face, this claim 

fails as a matter of law. It is settled in Delaware that “an action in conversion will 

not lie to enforce a claim for the payment of money.”245 Although Delaware law has 

not formally recognized any exceptions to this rule, other states allow an exception

for allegations that a defendant converted money “only when [the money] can be 

described or identified as a specific chattel, but not where an indebtedness may be 

discharged by the payment of money generally.”246 Assuming, for the sake of 

argument, this exception would be recognized in Delaware, it is clearly inapplicable. 

There is nothing distinctive about the money Buyer paid for OnRamp that would 

 

243 Haney v. Blackhawk Network Hldgs., Inc., 2016 WL 769595, at *9 (Del. Ch. Feb. 26, 

2016). Defendants half-heartedly protest that Buyer’s rescission claim is merely “an artful 

way of asking for damages.” RB 23 (quoting Metro Commc’n Corp. BVI v. Advanced 

Mobilecomm Techs. Inc., 854 A.2d 121, 160 n.93 (Del. Ch. 2004)). But, as discussed 

above, it is at least conceivable that Buyer will be able to prove the UPA was the product 

of fraud. And, because fraud is a common ground for rescission, it is then conceivable 

Buyer will be able to prove at trial the contract must be rescinded. See Norton v. Poplos, 

443 A.2d 1, 4 (Del. 1982). No greater showing is required at the pleading stage. 

244 Compl. ¶ 132. 

245 Kuroda v. SPJS Hldgs., L.L.C., 971 A.2d 872, 889–90 (Del. Ch. 2009). 

246 Id. at 890. 
57

justify a characterization of that money as a “unique chattel.” Buyer, no doubt, will 

be glad to accept Defendants’ money from wherever it might be sourced should 

Buyer prove its case and achieve an award of damages. Accordingly, Buyer’s

conversion claim must be dismissed.

III. CONCLUSION

For the reasons stated above, Defendants’ Motion to Dismiss Counts II, IV, 

V, VII and IX–XIII of the Complaint is GRANTED. Their Motion to Dismiss 

Counts I, III, VI and VIII is DENIED.

IT IS SO ORDERED.