IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

AHMED AL BALOOSHI, )

)

 Plaintiff, )

)

 v. ) C.A. No. N19C-10-215 CEB

) 

GVP GLOBAL CORP., )

)

 Defendant. )

Submitted: November 29, 2021

Decided: February 25, 2022

POST-TRIAL MEMORANDUM OPINION

R. Eric Hacker, Esquire, MORRIS JAMES LLP, Wilmington, Delaware. Attorney

for Plaintiff Ahmed Al Balooshi.

Kevin S. Mann, Esquire, and David G. Holmes, Esquire, CROSS & SIMON, LLC, 

Wilmington, Delaware. Attorneys for Defendant GVP Global Corp.

BUTLER, R.J.
2

Plaintiff Ahmed Al Balooshi was retained as a financial advisor by Defendant 

GVP Global Corp. (“GVPGC” or the “Company”) to assist in raising startup capital

for one of the Company’s venture funds, Ames Street Capital Corp I LP (the 

“Fund”). Balooshi brought this breach-of-contract action against the Company to 

recover some of his unpaid compensation. Having considered all the evidence

presented at trial, the Court finds that GVPGC breached its payment obligations and 

failed to prove any of its defenses to the breach. Accordingly, the Court will enter

judgment in Balooshi’s favor for $130,221.51, plus rule-based costs, and pre- and 

post-judgment interest. The Court, however, does not find attorney’s fee-shifting to 

be warranted in this case. Balooshi’s award will not include his attorney’s fees.

FACTUAL FINDINGS

The parties conducted a two-day bench trial during which they introduced live 

testimony from two witnesses—Balooshi and GVPGC’s founder and president, 

David Billings—and documentary evidence contained in a joint appendix.

1

 After 

trial, the parties filed supplemental briefing. The Court has considered the entire 

record but limits its findings to those relevant to Balooshi’s claim and the 

1 Where appropriate, the Court will cite to specific items in the record, including 

documents contained in the appendix (“JX[#]”).
3

Company’s defenses. The following facts were proven by a preponderance of the 

evidence.2

A. GVPGC Retains Balooshi

Balooshi and Billings met while Balooshi was working as an investment 

banker. At the time, Billings was planning one of the Fund’s first equity offerings. 

Billings wanted to launch the Fund through a private placement targeted primarily

at investors active in Middle East capital markets. Balooshi, a Bahraini citizen, told 

Billings about his connections to investors located in the Gulf countries. After a few 

conversations, Billings hired Balooshi to spearhead the Fund’s promotional efforts, 

strengthen the Fund’s marketability, and recruit investors from the Middle East. 

B. The Parties Execute the Agent Agreement and the NDA

The parties memorialized their relationship in two agreements: a retainer

agreement (the “Agent Agreement”)3and a confidentiality agreement (the “NDA”).4 

The Agent Agreement outlined Balooshi’s responsibilities and set the rate and terms 

of his compensation. The NDA governed Balooshi’s disclosure and use of 

2 The preponderance of the evidence standard governs contract claims and defenses. 

E.g., Stone & Paper Invs., LLC v. Blanch, 2021 WL 3240373, at *16 (Del. Ch. July 

30, 2021). Using that standard, the Court resolved competing testimony and exhibits

by crediting “the side [with] ‘the greater weight of the evidence.’” Taylor v. State, 

2000 WL 313501, at *2 (Del. Feb. 23, 2000) (quoting Reynolds v. Reynolds, 237 

A.2d 708, 711 (Del. 1967)).

3

JX18 (hereinafter “Agent Agreement”).

4

JX5 (hereinafter “NDA”).
4

GVPGC’s proprietary information and his ability to compete with the Company. 

The Company drafted both agreements and rejected Balooshi’s attempts to 

renegotiate their relevant terms.

1. Relevant Terms in the Agent Agreement

a. Background Provisions

The Agent Agreement contemplated a three-year term effective as of May 8, 

2017 that could have been terminated earlier upon written notice from either party.

5

 

During its life, the Agent Agreement tasked Balooshi with several “functions” that 

reduced fundamentally to making “investment referrals” and “assisting in [the] 

process” of securing investments for the Fund.6 

Separately, the Agent Agreement included a severability clause. The 

severability clause provides that the Agent Agreement should be enforced on its

valid terms even if one or more of its terms are deemed invalid.7

b. Payment Provisions

The Agent Agreement structured Balooshi’s compensation as two forms of 

income. First, the Company agreed to pay Balooshi a flat fee of $15,000 per month

(the “Flat Fee”).8 The Flat Fee operated as a salary. It was not subject to audit or 

5 Agent Agreement at 3.

6

Id. at 1.

7

Id. at 3, 9.

8

Id. at 13.
5

conditioned on achieving specific results. At the end of each month, Balooshi would 

send GVPGC an invoice that billed the Flat Fee plus any reasonable expenses he 

incurred over a given period. Balooshi agreed to front those expenses and the 

Company agreed to reimburse them within 30 days after it received notice.

9

 

Second, the Company agreed to pay Balooshi an incentive-based contingent 

fee (the “Referral Fee”).10 The Referral Fee operated as a commission, priced using 

a 3% benchmark that was subject to post-execution adjustments per unspecified 

“laws and regulations.”11 As a commission, the Company had no obligation to remit 

the Referral Fee unless (i) Balooshi personally referred an investor; (ii) the Company 

found the investor acceptable; and (iii) the investment closed.

12

 Unlike the Flat Fee, 

the Referral Fee was tied to the Fund’s success. Stated conversely, even if Balooshi 

failed to earn a Referral Fee—i.e., did not raise any money for the Fund—he would 

remain entitled to the Flat Fee and his reasonable expenses.

2. Relevant Terms in the NDA

The Company also required Balooshi’s consent to the NDA, which was 

executed contemporaneously with, and incorporated into, the Agent Agreement.13 

The NDA barred Balooshi from using GVPGC information and intellectual property

9

Id.

10 Id. at 11.

11 Id.

12 Id. at 5, 12–13.

13 Id. at 2.
6

for his personal advantage.14 It also barred Balooshi from steering business

opportunities with certain individuals and entities away from GVPGC. Those 

individuals and entities were named in a no-contact list that was attached to the 

NDA.

15

 The NDA provided its own breach remedies, however, and so any violation 

did not purport to excuse the Company’s obligations under the Agent Agreement.

16

C. Balooshi Assists GVPGC with Marketing the Fund to Potential Investors

Months before the Agent Agreement was fully executed, Balooshi redrafted 

the Fund’s marketing materials to align them with industry norms and foreign 

investors’ preferences.

17

 Next, he tapped his professional contacts in the Gulf. 

Having deployed his contacts, Balooshi then traveled to the Gulf to network with 

potential investors. Throughout this time, Balooshi updated GVPGC on his progress 

and recommended strategies for preventing the Fund from losing momentum or 

appearing too risky.

Balooshi delivered. After his return, Balooshi arranged a week-long business 

trip to the Middle East that the parties called the “Road Show.” The Road Show 

involved 12 live presentations during which GVPGC management used Balooshi’s 

14 E.g., NDA §§ 5–7, 11–12.

15 Id. at Exs. A–B.

16 Id. § 13.

17 E.g., JX9, JX100–03. In apparent recognition of Balooshi’s early work, the 

Company made the Agent Agreement, which was executed in October 2017,

retroactive to May 2017, i.e., when Balooshi was hired. Agent Agreement at 1.
7

revised marketing materials to pitch the Fund to various institutional and royal 

investors across the United Arab Emirates, Saudi Arabia, Bahrain, and Oman.18 To 

further support the Road Show, Balooshi booked the parties’ accommodations and 

flights, created daily itineraries and meeting agendas, held team debriefings between 

conference dates, and recruited a local aide to schedule events.

In the end, the Road Show did not result in any investments. But the Company 

still considered it a success. Billings praised Balooshi for organizing the Road Show 

in written communications to the Company’s stakeholders. The Company never 

claimed that Balooshi performed deficiently or failed to perform at all.

After the Road Show concluded, Balooshi maintained contact with the Gulf

investors. He distributed reports to GVPGC that tracked their engagement levels. 

He proposed methods for sustaining their interest. And he continued to develop 

ideas for marketing the Fund abroad. These initiatives were discussed during routine 

office calls between Balooshi and GVPGC management. Neither during those calls 

nor any time else did the Company criticize Balooshi’s work or redirect it.

D. The Parties Explore Vektor Vodka

While retained, Balooshi learned of Native Spirits Limited, LLC, an alcohol 

manufacturer. Native had been considering a new product line, “Vektor Vodka,” 

and needed investments to launch the brand. In due course, Native offered to retain

18 JX51.
8

Balooshi to secure some of those investments. Balooshi was interested, but 

recognized his obligations to the Fund. So he presented Vektor to GVPGC. 

The Company showed interest too. Billings intended to introduce Vektor to

his contacts in China. Billings also authorized Balooshi to pursue a GVPGC 

stakeholder, William Eckholm, for a contribution. Given the Company’s increasing 

involvement, Balooshi drafted a profit-sharing agreement through which the 

Company would collect a percentage of Balooshi’s commissions on Vektor 

investments.19 It is not clear if that agreement ever was formalized. But it is clear 

that (1) neither Native nor Eckholm was named in the NDA’s no-contact list; and 

(2) GVPGC knew about Vektor and participated in or encouraged Balooshi’s 

assistance. 

E. GVPGC Fails to Pay Balooshi

In October 2017, the Company missed its first Flat Fee and expense payments. 

Then it missed all the rest. The Company did make some untimely payments. But 

even those were sent irregularly and never made the Company’s account current.

The Company did not defend its defaults on the ground that Balooshi was in 

breach of the Agent Agreement or the NDA. Instead, the Company explained that 

it could not make its payments on time or predictably until it obtained working 

capital from the Fund and unrelated projects. In other words, the Company blamed 

19 JX37.
9

its own insolvency for its defaults, not Balooshi’s performance. Despite the 

Company’s repeated failure to meet its payment obligations, Balooshi continued 

working and sending his invoices until the Agent Agreement terminated. 

Balooshi kept an itemized spreadsheet that summarized the Company’s 

outstanding balance and sporadic payments.

20

 The entries reflected: $195,765.60 in 

Flat Fee and expense charges, minus $65,544.09 in belated and intermittent 

payments, for a total of $130,221.51 in unpaid compensation and reimbursements. 

The Company has never disputed that figure. 

F. GVPGC Terminates the Agent Agreement

The Company terminated the Agent Agreement on May 2, 2018, through an 

e-mail from Billings to Balooshi.21 As a basis for termination, Billings cited a lack 

of “actual results.”22 He also raised previously unknown concerns with Balooshi’s 

role at Vektor. According to Billings, Balooshi violated the NDA by “using [his] 

contacts to raise capital” for Vektor without the Company’s permission.

23

On May 28, 2018, Balooshi sent a final invoice to GVPGC that demanded the 

$130,221.51 in unpaid Flat Fees and expenses.

24

 The Company did not respond. 

20 JX93.

21 The Company produced two iterations of the termination e-mail. See JX65, 97. 

Although Balooshi disputes the e-mail’s legitimacy, see infra Relief Awarded § 2,

he agrees that the Agent Agreement terminated in May 2018.

22 JX65.

23 Id.

24 JX63.
10

Balooshi reasserted his demand three times.25 The Company did not respond to 

those demands either. 

G. Balooshi Sues

On October 25, 2019, Balooshi filed a one count complaint against the 

Company that alleged a breach of contract based on GVPGC’s failure to pay all his 

Flat Fees and expenses. He sought as damages the unpaid $130,221.51 balance, plus 

rule-based costs, and pre- and post-judgment interest. He also sought his attorney’s 

fees under the bad faith exception to the American Rule. He did not seek, or ever 

claim that he earned, a Referral Fee.

Before litigation, the Company never claimed that Balooshi performed 

inadequately or that the parties’ contracts were void. Once sued, however, the 

Company changed its tune.

GVPGC, through its former counsel, filed an answer. The answer did not 

assert any counterclaims. Instead, it raised two “affirmative defenses:” “[b]reach of 

fiduciary duty” and “[f]ailure to perform as obligated under the contract.”26 Over 

time, the Company’s defense evolved. At the close of discovery, the Company 

moved for summary judgment on the theory that the Agent Agreement was void as 

illegal because it mandated securities broker-dealer activities for which Balooshi 

25 JX92–94.

26 D.I. 5 ¶¶ 47–48 (Ans.).
11

was not registered. Even later, the Company asserted an implied covenant of good 

faith and fair dealing defense.

The Court denied the Company’s summary judgment motion. After the 

motion was denied, the Company’s trial counsel entered an appearance. Through its 

new counsel, the Company stipulated to five “issues of fact and law” that the parties’ 

would present during trial: (1) whether GVPGC breached the Agent Agreement; (2) 

the amount of damages Balooshi suffered as a result of any breach; (3) whether 

Balooshi breached the Agent Agreement by failing to perform; (4) whether Balooshi 

breached his fiduciary duties under the NDA, and if so, how the breach impacts any 

damages Balooshi proves; and (5) whether the Agent Agreement is void for 

requiring Balooshi to engage in illegal securities activities.27 The Court used these 

stipulations as a guide for reaching the conclusions below.

LEGAL CONCLUSIONS

Resolving this case requires the Court to interpret the parties’ contracts. 

Delaware law governs both contracts.

28

 Under Delaware law, the principles of 

contract interpretation are well-established and grounded on the parties’ objective 

27 D.I. 47 § 3 (Pre-Trial Stip.).

28 NDA § 15(A). The Agent Agreement designated the “laws of the District of 

Delaware” as the parties’ choice of law for interpretive issues. Agent Agreement at 

9. The District of Delaware is a federal court, not a regime of substantive contract 

law. But because federal courts sitting in diversity apply state law to contract

disputes, the Court has construed this provision as a Delaware choice of law clause.
12

intent at the time of contracting as expressed by the plain language contained within 

their agreement’s four corners.29 The Court construes a contract as a whole, giving 

purpose to each provision.30 And the Court accords a contract’s “clear and

unambiguous terms . . . their ordinary meaning.”

31

 “A court must accept and apply 

the plain meaning of an unambiguous term . . . insofar as the parties would have 

agreed ex ante.”32 “If a writing is plain and clear on its face, i.e., its language conveys 

an unmistakable meaning, the writing itself is the sole source for gaining an 

understanding of intent.”33

“Absent some ambiguity, Delaware courts will not destroy or twist [contract] 

language under the guise of construing it.”34 Ambiguity exists only if a term “is 

fairly or reasonably susceptible of more than one meaning.”35 So a contract “is not 

ambiguous simply because the parties disagree on its meaning.”36 “Even if the 

bargain they strike ends up a bad deal for one or both parties, the court’s role is to 

29 E.g., In re Viking Pump, Inc., 148 A.3d 633, 648 (Del. 2016).

30 E.g., Elliott Assocs., L.P. v. Avatex Corp., 715 A.2d 843, 854 (Del. 1998).

31 Leaf Invenergy Co. v. Invenergy Renewables LLC, 210 A.3d 688, 696 (Del. 2019) 

(internal quotation marks omitted).

32 Lorillard Tobacco Co. v. Am. Legacy Found., 903 A.2d 728, 740 (Del. 2006).

33 City Investing Co. Liquidating Tr. v. Cont’l Cas. Co., 624 A.2d 1191, 1198 (Del. 

1993).

34 Rhone–Poulenc Basic Chems. Co. v. Am. Motorists Ins. Co., 616 A.2d 1192, 1195 

(Del. 1992).

35 Alta Berkeley VI C.V. v. Omneon, Inc., 41 A.3d 381, 385 (Del. 2012).

36 E.I. du Pont de Nemours & Co. v. Allstate Ins. Co., 693 A.2d 1059, 1061 (Del. 

1997).
13

enforce the agreement as written.”37 “It is not the court’s role to rewrite the contract

. . . [or] allocat[e] the risk of an agreement after the fact . . . .”38

“Where a contract is ambiguous, the interpreting court must look beyond the 

language of the contract to ascertain the parties’ intentions.”39 If a contract is 

ambiguous, then the Court may consider extrinsic evidence of its meaning.40 But 

even when extrinsic evidence is admissible, the Court cannot rely on it unless it

“speak[s] to the intent of all parties to a contract.”41 If extrinsic evidence fails to 

forge “some connection between the expectations of the contracting parties . . . and 

the way the contract terms were articulated by those parties[,]” then the evidence 

“provides an incomplete guide with which to interpret contractual language.”42

The prevailing contract interpretation must be reasonable.

43

 A contract 

interpretation is reasonable when the contract language is “read in full and situated 

37 Glaxo Grp. Ltd. v. DRIT LP, 248 A.3d 911, 919 (Del. 2021).

38 Wal–Mart Stores, Inc. v. AIG Life Ins. Co., 872 A.2d 611, 624 (Del. Ch. 2005), 

rev’d in part on other grounds, 901 A.2d 106 (Del. 2006). 

39 GMG Cap. Invs., LLC v. Athenian Venture Partners I, L.P., 36 A.3d 776, 780 

(Del. 2012) (internal quotation marks omitted).

40 E.g., Sunline Com. Carriers, Inc. v. CITGO Petroleum Corp., 206 A.3d 836, 847 

(Del. 2019).

41 SI Mgmt. L.P. v. Wininger, 707 A.2d 37, 43 (Del. 1998).

42 Id.

43 See, e.g., Salamone v. Gorman, 106 A.3d 354, 368 (Del. 2014) (“Contract terms 

themselves will be controlling when they establish the parties’ common meaning so 

that a reasonable person in the position of either party would have no expectations 

inconsistent with the contract language.” (internal quotation marks omitted)).
14

in the commercial context between the parties.”44 Even so, “background facts cannot 

be used to alter the language chosen by the parties within the four corners of their 

agreement.”45 “[I]t is not the job of a court to relieve . . . parties of the burdens of 

contracts they wish they had drafted differently but in fact did not.”

46

A. GVPGC Breached the Agent Agreement

Balooshi sought to prove that the Company breached the Agent Agreement. 

To prove a breach of contract, the plaintiff must demonstrate by a preponderance of 

the evidence (1) a contractual obligation; (2) a breach of that obligation; and (3) 

resulting damage.

47

 As explained below, Balooshi proved his claim. The Company 

had a duty to pay Balooshi his Flat Fees and to reimburse his expenses. It breached 

its obligations by failing to pay either balance fully. And its breach caused Balooshi 

to suffer $130,221.51 in damage.

1. The Company had contractual obligations to pay Balooshi.

There was no serious dispute that GVPGC had payment duties under the 

Agent Agreement. The Agent Agreement imposed a duty on GVPGC to pay 

Balooshi the Flat Fee at the end of each month. And it imposed a duty on GVPGC

44 Chi. Bridge & Iron Co. N.V. v. Westinghouse Elec. Co. LLC, 166 A.3d 912, 926–

27 (Del. 2017); accord OptiNose AS v. Currax Pharms., LLC, 264 A.3d 629, 638 

(Del. 2021).

45 Town of Cheswold v. Cent. Del. Bus. Park, 188 A.3d 810, 820 (Del. 2018).

46 DeLucca v. KKAT Mgmt., L.L.C., 2006 WL 224058, at *2 (Del. Ch. Jan. 23, 2006).

47 E.g., VLIW Tech., LLC v. Hewlett–Packard Co., 840 A.2d 606, 612 (Del. 2003).
15

to reimburse Balooshi’s expenses within 30 days after receiving notice of them. 

There was nothing ambiguous about these obligations. Accordingly, Balooshi 

proved GVPGC had a contractual duty to pay him the amounts he sought.

2. The Company breached its payment obligations.

There also was no serious dispute that GVPGC did not pay Balooshi all the

Flat Fees and expenses that came due. Balooshi’s spreadsheet tabulated $195,765.60 

in charges from May 2017 to May 2018. The Company accepted that balance and

paid $65,544.09 toward the total, but eventually explained that it lacked the working 

capital to settle the remainder. The Agent Agreement, however, required timely and 

full payment and did not permit GVPGC to delay payment or to underpay without 

penalty. Accordingly, Balooshi proved that GVPGC breached its payment duties by 

failing to pay him all he was owed.

3. The Company’s breach caused damage to Balooshi.

Finally, Balooshi proved that the Company’s breach caused him monetary 

damages. Subtracting the Company’s payments from the overall balance, Balooshi 

remains owed $130,221.51. The Company did not dispute this net amount or the 

basis for its calculation. Accordingly, the Court finds that the Company’s breach 

caused Balooshi $130,221.51 in damage.

In sum, Balooshi proved his claim. The question now becomes whether 

GVPGC proved any of its defenses to its breach. For the reasons below, it did not.
16

B. GVPGC Failed to Prove Its Defenses

GVPGC breached the Agent Agreement. The Company tried to resist this 

straightforward conclusion by advancing a barrage of unsuccessful defenses.

1. Balooshi did not breach the Agent Agreement.

The Company first sought to prove that Balooshi materially breached the 

Agent Agreement by “utterly fail[ing] to . . . [do] anything.”

48

 Overwhelming

evidence showed otherwise. The evidence showed Balooshi (i) redrafted the Fund’s 

marketing materials to attract investors; (ii) utilized and visited his professional 

network in the Gulf to lay the groundwork for promoting the Fund there in the future; 

(iii) organized the Road Show, including the investor meetings and daily logistics; 

(iv) coached GVPGC management on how best to appeal to the Road Show 

investors; (v) followed up with the Road Show investors to encourage their interest; 

(vi) created reports that tracked their engagement levels; (vii) recommended 

alternative strategies for obtaining foreign investments beyond those possible in the 

Gulf; and (viii) led weekly team discussions during which he updated GVPGC 

management on his ongoing progress and proposed new ideas. 

Without evidentiary support for a total non-performance theory, the Company

pivots to arguing that Balooshi is not entitled to any damages because (a) no one 

48 D.I. 58 at 21 (Def.’s Post-Trial Br.).
17

invested in the Fund; and (b) he failed to use his “best efforts” to obtain investments. 

These arguments are contradicted by the Agent Agreement.

a. The lack of actual investment argument fails.

The Company argues that Balooshi is not entitled to his pay because he failed 

to obtain any investments for the Fund. But the Agent Agreement built the actual 

investment requirement into the Referral Fee, not the Flat Fee, and Balooshi never 

asked for a Referral Fee. The Company’s contrary contractual interpretation is not 

reasonable.

The Agent Agreement’s plain language does not impose conditions on the Flat 

Fee. The Flat Fee was not bound to the Fund’s success, but rather, was payable as a 

salary each month. In contrast, the Referral Fee was payable as a commission and 

so was unavailable unless Balooshi actually secured investments for the Fund. By

separating the Agent Agreement into two Fees, the parties plainly intended to 

separate the bases for paying those Fees too. 

What the Agent Agreement’s plain language suggests, its basic commercial 

context confirms. The Fund intended to offer $150 million (i.e., six $25 million 

units each split into six $6.25 million pieces) in equity to founding investors over 

four capital calls.

49 A commission of at least 3% on each referred pledgor would 

have rewarded Balooshi with a substantial bonus. Understandably, GVPGC was 

49 Agent Agreement at 11.
18

unwilling to pay the Referral Fee on such large values unless Balooshi’s investors 

committed. Given GVPGC’s conceded liquidity problems, paying the Referral Fee 

would not have been possible otherwise anyway. From this view of the evidence, it 

makes sense why a commission would require conditions and results, but a 

comparatively modest $15,000 salary would require neither.

An interpretation that requires Balooshi to secure actual investments to obtain 

both the Flat and Referral Fees would impermissibly render the Agent Agreement’s 

dual compensation structure redundant50 or one Fee superfluous.

51

 On that reading, 

every Fee would be a Referral Fee. That interpretation also would, 

counterintuitively, require Balooshi to earn a commission before he could receive a

salary. Had these consequences been the parties’ intent, the Agent Agreement’s 

unambiguous language would have reflected it. It does not because it was not. The 

50 Cf. Sycamore Partners Mgmt., L.P. v. Endurance Am. Ins. Co., 2021 WL 4130361, 

at *12 n.98 (Del. Super. Ct. Sept. 10, 2021) (“[A] construction that produces some 

redundancy is acceptable if the construction gives effect to the contract language and 

discharges the parties’ intent.” (internal quotation marks omitted)); U.S. W., Inc. v.

Time Warner Inc., 1996 WL 307445, at *15 (Del. Ch. June 6, 1996) (“While 

redundancy is sought to be avoided in interpreting contracts, this principle of 

construction does not go so far as to counsel the creation of contract meaning for 

which there is little or no support in order to avoid redundancy.”). 

51 See, e.g., Honeywell Int’l, Inc. v. Air Prods. & Chems., Inc., 872 A.2d 944, 956 

(Del. 2005) (“Generally, and absent evidence calling for a different result, all parts 

of a contract must be read in harmony to determine the contract's meaning, with one 

portion of a contract not being read to negate a different portion.”); Sonitrol Holding 

Co. v. Marceau Investissements, 607 A.2d 1177, 1183 (Del. 1992) (“Under general 

principles of contract law, a contract should be interpreted in such a way as to not 

render any of its provisions illusory or meaningless.”).
19

Company cannot rewrite the Agent Agreement by grafting onto the provisions 

guaranteeing the Flat Fee the performance standards qualifying the Referral Fee.52 

Although the Flat Fee was unqualified, the Company was not shackled to it.

As Billings recognized, GVPGC could discontinue the Flat Fee by firing Balooshi. 

Terminating the Agent Agreement, however, did not absolve past debts under it. 

The fact that GVPGC did not fire Balooshi until it amassed over $130,000 in unpaid

bills does not mean the balance is any less due. It simply suggests the Company 

waited too long. Investments or not, the evidence failed to justify GVPGC’s breach.

b. The “best efforts” argument fails.

Alternatively, the Company argues Balooshi is not entitled to his pay because 

he did not use his “best efforts” to obtain investments for the Fund. The “best 

efforts” clause is a provision in the Agent Agreement53 that was not discussed at trial

and this argument did not appear until GVPGC’s post-trial brief. Although a best 

efforts requirement does appear in the Agent Agreement, its late arrival to the case

comes without evidentiary support and, on this record, fails to support a defense. 

52 See, e.g., NAMA Holdings, LLC v. World Mkt. Ctr. Venture, LLC, 948 A.2d 411, 

419 (Del. Ch. 2007) (“Contractual interpretation operates under the assumption that 

the parties never include superfluous verbiage in their agreement, and that each word 

should be given meaning and effect by the court.”), aff’d, 2008 WL 571543 (Del. 

Mar. 4, 2008); see also E.I. du Pont de Nemours & Co., Inc. v. Shell Oil Co., 498 

A.2d 1108, 1113 (Del. 1985) (“[T]he meaning [that] arises from a particular portion 

of an agreement cannot control the meaning of the entire agreement where such 

inference runs counter to the agreement’s overall scheme and plan.”).

53 Agent Agreement at 3.
20

The Agent Agreement did not define “best efforts.” But that is not an 

invitation for the Company to define it with the Herculean labors it seeks to insert.

54

 

To the contrary, a clause requiring a party to use its best efforts “cannot mean” that 

the party must do “everything possible under the sun.”55 Because the duty to use 

best efforts “depends on others or may be hindered by events beyond the party’s 

control,”

56 best efforts clauses are “implicitly qualified by a reasonableness test.”57

 

Balooshi’s efforts were reasonable. The evidence showed that Balooshi

undertook multiple efforts to market the Fund before, during, and after the Road

Show. Balooshi thus discharged one of his chief functions: “assisting in the process” 

of securing investments for the Fund.

58

 The work he completed cannot be 

discounted as a “waste of time”59 merely because the Gulf investors decided to walk. 

After all, Balooshi was not required, as Billings contended, to achieve “actual 

54 See, e.g., D.I. 58 at 9–16, 22 (Def.’s Post-Trial Br.) (offering a menu of efforts it 

never communicated to Balooshi, but still believes Balooshi should have done).

55 AB Stable VIII LLC v. Maps Hotels & Resorts One LLC, 2020 WL 7024929, at 

*91 (Del. Ch. Nov. 30, 2020) (internal quotation marks omitted), aff’d, -- A.3d --,

2021 WL 5832875 (Del. Dec. 8, 2021). See Williams Cos., Inc. v. Energy Transfer 

Equity, L.P., 159 A.3d 264, 272–73 (Del. 2017) (approving a “reasonable steps” 

standard in the efforts clause context). See also Channel Medsys., Inc. v. Bos. Sci. 

Corp., 2019 WL 6896462, at *37 n.410 (Del. Ch. Dec. 18, 2019) (noting that there 

is “little support” in Delaware law for drawing “distinctions” between types of 

efforts clauses (e.g., “reasonable” efforts vs. “best” efforts clauses)).

56 Akorn, Inc. v. Fresenius Kabi AG, 2018 WL 4719347, at *86 (Del. Ch. Oct. 1, 

2018), aff’d, 2018 WL 6427137 (Del. Dec. 7, 2018).

57 AB Stable, 2020 WL 7024929, at *91 (internal quotation marks omitted). 

58 Agent Agreement at 1.

59 D.I. 58 at 13, 21 (Def.’s Post-Trial Br.).
21

results” to get paid.60 By only asking for his best efforts, rather than a measurable

quantum of performance, the Company assumed the risk that Balooshi would be 

unsuccessful in securing investors from the Middle East. Stated another way, the 

Company could have defined the Flat Fee using specific efforts. It did not. The 

Court, however, must “interpret the contracts as written and not as hoped for by 

litigation-driven arguments.”61

Plus, the Company’s best efforts argument again conflates the Referral and 

Flat Fees. If “securing actual investments” were synonymous with “best efforts,”

then there would be no reason for a Flat Fee.

62

 Put differently, if the Company 

intended Balooshi to work solely on commission, then the Agent Agreement would 

not have granted him a salary. As a result, GVPGC’s reading “violat[es] the basic 

rule of construction that no part of an agreement should be rendered superfluous.”63

In sum, none of the evidence showed that Balooshi breached the Agent 

Agreement. Accordingly, the Company’s material breach defense fails.

60 JX65.

61 Urdan v. WR Cap. Partners, LLC, 244 A.3d 668, 675 (Del. 2020).

62 See DCV Holdings, Inc. v. ConAgra, Inc., 889 A.2d 954, 961 (Del. 2005) 

(“Specific language in a contract controls over general language, and where specific 

and general provisions conflict, the specific provision ordinarily qualifies the 

meaning of the general one.”).

63 Intel Corp. v. Am. Guar. & Liab. Ins. Co., 51 A.3d 442, 451 (Del. 2012).
22

2. There was no implied covenant in the Agent Agreement.

Unable to find support in the Agent Agreement’s express terms, the Company 

resorts to searching for implied ones. It contends that Balooshi breached the implied 

covenant of good faith and fair dealing by “frustrating the [Agent] Agreement’s 

overarching purpose” and “lazily control[ling] the presentation of the Fund’s 

interests.”64 The Company failed to prove a breach of the implied covenant.

To prove a breach of an implied covenant, the claimant must demonstrate by 

a preponderance of the evidence (i) a specific, implied contractual obligation; (ii) a 

breach of that obligation; and (iii) resulting damage.65 The implied covenant of good 

faith and fair dealing is a gap-filling device that addresses unanticipated contractual 

developments by inferring terms in an agreement’s express language to which the 

parties would have agreed at the time of contracting had they considered them.66 

“Existing contract terms control, however,” and so the covenant “cannot be used to 

circumvent the parties’ bargain[] or to create a free-floating duty . . . unattached to 

the underlying” agreement.67 As a consequence, “[a]n essential predicate for the 

application of the implied covenant is the existence of a ‘gap’ in the relevant 

64 D.I. 58 at 31 (Def.’s Post-Trial Br.).

65 E.g., Buck v. Viking Holding Mgmt. Co. LLC, 2021 WL 673459, at *5 (Del. Super. 

Ct. Feb. 22, 2021).

66 E.g., Dieckman v. Regency GP LP, 155 A.3d 358, 367 (Del. 2017); Katz v. Oak 

Indus., Inc., 508 A.2d 873, 880 (Del. Ch. 1986).

67 Dunlap v. State Farm Fire & Cas. Co., 878 A.2d 434, 441 (Del. 2005) (omission 

in original) (internal quotation marks and citations omitted).
23

agreement.”68 The implied covenant is inapplicable unless the asserting party 

demonstrates that the agreement is “truly silent” on the obligation asserted.69

The Company did not identify a gap in the Agent Agreement. Far from 

suggesting the existence of an implied term, the Agent Agreement expressly 

provided that Balooshi was not required to achieve certain results to be paid the Flat 

Fee and his reasonable expenses. To reiterate: The Agent Agreement made Flat Fee 

payments and expense reimbursements automatic, tempered only by the Company’s 

right to terminate. Properly construed, then, the Company’s implied covenant

amounts to a repackaged version of its failed express breach defense. The covenant 

does not work that way.

70 Accordingly, the implied covenant defense fails.

The Company’s contrary reasoning misunderstands the implied covenant. 

GVPGC contends, for example, that Balooshi could “breach . . . the duty of good 

68 DG BF, LLC v. Ray, 2021 WL 776742, at *15 (Del. Ch. Mar. 1, 2021).

69 Oxbow Carbon & Min. Holdings, Inc. v. Crestview–Oxbow Acquisition, LLC, 202 

A.3d 482, 507 (Del. 2019) (internal quotation marks omitted). Cf. Gerber v. Enter. 

Prods. Holdings, LLC, 67 A.3d 400, 419 (Del. 2013) (“Express contractual 

provisions always supersede the implied covenant . . . .” (internal quotation marks 

omitted)), overruled in part on other grounds by Winshall v. Viacom Int’l, Inc., 76 

A.3d 808, 815 n.13 (Del. 2013).

70 E.g., Nationwide Emerging Managers, LLC v. Northpointe Holdings, LLC, 112 

A.3d 878, 896 (Del. 2015) (The implied covenant “does not apply when the contract 

addresses the conduct at issue.”); Nemec v. Shrader, 991 A.2d 1120, 1125–26 (Del. 

2010) (“One generally cannot base a claim for breach of the implied covenant on 

conduct authorized by the agreement.” (alteration and internal quotation marks 

omitted)).
24

faith and fair dealing even if there was no breach of the underlying contract.”71 He 

could have—but only if, as a threshold matter, the Company proved the Agent 

Agreement was truly silent on the issues of performance and payment. It did not. 

Similarly, the Company could not prove an implied covenant by claiming 

Balooshi secretly intended not to perform. “Notwithstanding the covenant's 

potentially misleading moniker . . . a claim for breach of the implied covenant is a 

contract claim . . . .”

72

 A contract claim does not depend for its proof on a mental 

state.73 Instead, it depends on actions or omissions. But here, the Company failed 

to prove Balooshi did or did not do something that excuses it from paying him.

Finally, the Company could not prove an implied covenant by simply calling

Balooshi’s failure to meet its own expectations “bad faith.” The implied covenant 

is a contract claim, not a tort or fiduciary claim. As a result, “allegations of bad faith 

conduct” are irrelevant.

74

 Indeed, the covenant’s “good faith” component “does not 

envision loyalty to [a] contractual counterparty.”75 Despite its name, “the covenant 

does not establish a free-floating requirement that a party act in some morally 

71 D.I. 58 at 31 (Def.’s Post-Trial Br.).

72 ASB Allegiance Real Est. Fund v. Scion Breckenridge Managing Member, LLC, 

50 A.3d 434, 444–45 (Del. Ch. 2012), rev’d on other grounds, 68 A.3d 665 (Del. 

2013).

73 Id. at 442.

74 Kuroda v. SPJS Holdings, L.L.C., 971 A.2d 872, 888 (Del. Ch. 2009).

75 Gerber, 67 A.3d at 419 (emphasis and internal quotation marks omitted).
25

commendable sense.”76 And it does not “necessarily require that a party have acted 

in subjective good faith.”77 The covenant is controlled by the parties’ original 

intent—not a one-sided notion of fairness urged at the time of the alleged wrong.78

Here, the Company has tried to use the covenant to “rebalanc[e] economic 

interests” upset by the Fund’s inability to attract investors.79 But the implied

covenant cannot be used to “rewrite a contract” the Company “now believes to have 

been a bad deal. Parties have a right to enter into good and bad contracts, the law 

enforces both.”80 The Company’s remorse is no reason to deny Balooshi his pay.81

3. Any illegality in the Agent Agreement did not warrant total avoidance.

Having found the Agent Agreement to be no help, the Company hopes to

discard it altogether. Halfway through the case, the Company began arguing that 

the Agent Agreement was illegal because it required Balooshi to engage in securities 

activities reserved for federally registered broker-dealers, of which he is not one. As 

76 Allen v. El Paso Pipeline GP Co., L.L.C., 113 A.3d 167, 182–83 (Del. Ch. 2014), 

aff’d, 2015 WL 803053 (Del. Feb. 26, 2015).

77 Id. at 183.

78 See Gerber, 67 A.3d at 418–19.

79 Oxbow, 202 A.3d at 507 (internal quotation marks omitted).

80 Nemec, 991 A.2d at 1126. See also Oxbow, 202 A.3d at 507 (“An interpreting 

court . . . should be most chary about implying a contractual [term] when the contract 

could easily have been drafted to expressly provide for it.” (alteration and internal 

quotation marks omitted)). 

81 E.g., Miller v. HCP & Co., 2018 WL 656378, at *2 (Del. Ch. Feb. 1, 2018) (“The 

implied covenant . . . is meant to enforce the intent of the parties, and not to modify 

that expressed intent where remorse has set in.”).
26

an initial matter, the Court notes that illegality is an affirmative defense that must be 

raised in an answer or else be waived.82 The Company did not raise illegality in its 

answer. Nevertheless, because Balooshi entertained this defense on summary 

judgment and at trial, the Court will address its merits. The Court, however, need 

not make a finding on whether the Agent Agreement is illegal. Assuming, for 

analytical purposes alone, that the Company proved certain aspects of the Agent 

Agreement were illegal, the Company still did not prove that the entire Agent 

Agreement is unenforceable.

In general, Delaware law prohibits courts from enforcing illegal agreements.83 

But not all “illegal agreements are . . . automatically void” and some “may not even 

be unenforceable.”84 Take, for example, a partially illegal contract.

85

 In that case, 

the contract may be “divisible” by its lawful and unlawful terms and so potentially 

enforceable on its lawful terms.86 In determining whether a partially illegal contract 

is enforceable on its lawful terms, two preliminary issues must be resolved. 

82 Del. Super. Ct. Civ. R. 8(c); James v. Glazer, 570 A.2d 1150, 1153 (Del. 1990).

83 E.g., Lincoln Nat’l Life Ins. Co. v. Joseph Schlanger 2006 Ins. Tr., 28 A.3d 436, 

441 (Del. 2011); Della Corp. v. Diamond, 210 A.2d 847, 849 (Del. 1965). See also 

Restatement (Second) of Contracts § 178 (1981).

84 1 Williston on Contracts § 3:3, Westlaw (4th ed. database) (last updated Nov. 

2021). The Supreme Court has relied on Professor Williston in analyzing contract 

issues. E.g., Eagle Force Holdings, LLC v. Campbell, 187 A.3d 1209, 1229, 1231 

& nn.142–43 (Del. 2018).

85 See, e.g., Doe v. Cedars Acad., LLC, 2010 WL 5825343, at *4 (Del. Super. Ct. 

Oct. 27, 2010).

86 Id.; see also Restatement (Second) of Contracts § 198.
27

First, the Court must determine whether the contract’s illegal terms are so 

“central to the parties’ agreement” that the plaintiff cannot prove its breach-ofcontract claim without them.

87

 If they are, then the contract is void despite any 

lawful terms expressed therein.88

Second, if the plaintiff can sustain its claim on the contract’s lawful terms 

alone, then the Court must determine whether the parties intended the lawful terms

to be “severable,” i.e., enforced notwithstanding partial avoidance.89 The parties’ 

intent may be determined conclusively from their agreement’s plain language.

90

 If

the parties “expressed in the contract directly” an expectation of severability—e.g., 

included an unambiguous severability clause—then the Court may sever and enforce 

the lawful terms.91 

a. Balooshi proved his case without relying on illegal terms.

The Company insists the Flat Fee could not have been earned without a 

broker-dealer license. But the only (arguable) references in the Agent Agreement92

87 1 Williston on Contracts § 3:3.

88 Id. §§ 3:3, 19:11–19:12.

89 Doe, 2010 WL 5825343, at *4; 1 Williston on Contracts § 3:3.

90 E.g., Eagle Indus., Inc. v. DeVilbiss Health Care, Inc., 702 A.2d 1228, 1232 (Del. 

1997).

91 Doe, 2010 WL 5825343, at *4.

92 The Company relies largely on extrinsic evidence in a private placement 

memorandum to support a finding that the Agent Agreement is illegal. E.g., D.I. 58 

at 22 (Def.’s Post-Trial Br.). But the Agent Agreement is unambiguous, making 

extrinsic evidence inadmissible. E.g., Sunline, 206 A.3d at 847. Even so, the 

Company concedes that “Balooshi was not involved in the preparation of the” 
28

to the securities laws arise from the Referral Fee, not the Flat Fee. Under the Agent 

Agreement, the Referral Fee was subject to “laws and regulations.”93 The Flat Fee 

was not. Assuming those laws and regulations are “securities” laws and 

regulations—which the Company never showed94—the Company (at best) could

have proved something illegal about the Referral Fee. But Balooshi never sought a 

Referral Fee. Accordingly, even if illegal, he did not need it to prove his claim.

b. The Flat Fee is severable and enforceable.

Since Balooshi’s case did not hinge on the “illegal” Referral Fee, the lawful

Flat Fee will remain enforceable if it is severable. It is. The Agent Agreement

contains a severability clause through which the parties “expressed . . . directly”95

that, if “any part” of the Agent Agreement was “held unenforceable,” the 

unenforceable part would “not affect the validity or enforceability of any other 

memorandum. D.I. 58 at 4 n.1 (Def.’s Post-Trial Br.). So it does not “speak to the 

intent of all parties” at the time the Agent Agreement was executed. SI Mgmt., 707 

A.2d at 43. See also D.I. 53 at 33:10–19 (Trial Tr.) (Sept. 13, 2021) (Balooshi 

testifying that securities registration was not discussed at the time the Agent 

Agreement was executed or any time after). The Court therefore gives it no weight. 

See SI Mgmt., 707 A.2d at 44 (“Because the . . . terms . . . appear[] to have been 

entirely within the control of one party . . . extrinsic evidence is irrelevant . . . .”).

93 Agent Agreement at 11. 

94 Delaware law typically requires an express reference to “securities” for a contract 

to incorporate federal securities law. See In re Verizon Ins. Coverage Appeals, 222 

A.3d 566, 572–75 (Del. 2019). The Company has not acknowledged this precedent.

95 Doe, 2010 WL 5825343, at *4.
29

part.”96 “Generally, a severability clause is enforceable.”97 And the Company has 

offered no reason to think this one is not. As a result, the Court finds that the Flat 

Fee is enforceable against the Company even if the Referral Fee is illegal. 

Accordingly, the illegality defense failed. 

4. Balooshi did not breach the NDA.

Having exhausted the Agent Agreement, the Company summons the NDA. 

At trial, the Company sought to prove that Balooshi breached the NDA by joining 

Native’s Vektor Vodka campaign and pursuing Eckholm for an initial investment. 

In its post-trial brief, however, the Company seems to have abandoned its NDA 

contract theory in favor of pressing the NDA fiduciary duty theory discussed 

below.98 To be sure, the Court finds GVPGC failed to prove any lasting claim to a 

contractual breach of the NDA.

The NDA contract defense rested on Billings’s termination e-mail. In the email, Billings alleged that Balooshi breached the NDA by using GVPGC’s contacts 

96 Agent Agreement at 3, 9.

97 Evans v. State, 872 A.2d 539, 552 (Del. 2005). See also Eagle Force, 187 A.3d 

at 1239 (suggesting that the trial court erred in failing to consider the effect of a valid 

severability clause that used substantially similar language to the Agent Agreement’s 

severability clause).

98 See D.I. 58 at 27 (Def.’s Post-Trial Br.) (“Balooshi breached his fiduciary duties 

to GVPGC through his solicitation of . . . Vektor . . . . Beyond the fact that this was 

a breach of the NDA, . . . this was all done when he should have been focused on 

GVPGC.” (emphasis added)). See also D.I. 47 § 3 (Pre-Trial Stip.) (limiting NDA 

presentation to fiduciary duty defense).
30

to solicit Native and Eckholm without the Company’s permission. The evidence 

showed that the e-mail itself was a bit of revisionist history and that its underlying 

premises were incorrect.

Recall that the NDA barred Balooshi from soliciting persons on the no-contact 

list and from disclosing GVPGC information to them for his “own benefit.”99 But 

none of the Native parties was on the no-contact list and neither was Eckholm.

100

 

And GVPGC—as well as Billings individually—collaborated with Balooshi to 

pursue Vektor.

101

 Balooshi even offered GVPGC a percentage of his commissions. 

Given all this, the Company’s evidence did not show that Balooshi breached the 

NDA. It also did not show why a breach of the NDA would excuse, rather than 

offset, overdue payments recurring under the Agent Agreement.102 Accordingly, 

any remnants of the NDA contract defense failed for lack of breach and damages.

5. The Court lacked jurisdiction over the fiduciary duty defense.

The Company sought to prove the NDA imposed fiduciary duties on Balooshi 

that he violated by dividing his loyalties between Vektor and the Fund. At trial, the 

99 NDA § 6.

100 See generally id. at Exs. A & B. See also id. § 11 (stating that the no-contact is 

“limited to” the parties on the list).

101 See id. § 5 (providing that information may be disclosed upon “written consent”).

102 But see id. § 13 (providing NDA-specific breach remedy). For a fuller discussion 

of this problem, see infra Legal Conclusions § 6.
31

Court103 reminded the Company that it lacks subject matter jurisdiction over disputes 

involving breaches of fiduciary duty.104 So the Company gained a burden to prove

another basis for jurisdiction over this defense.

105

 It did not because none exists. 

Undeterred, the Company contends that the rules precluding this Court from 

deciding fiduciary duty claims do not apply to fiduciary duty defenses.

106

 This is a 

distinction without difference. Rights and duties inherent to fiduciary relationships 

derive from equity, not law.107 And the Delaware Court of Chancery has exclusive 

jurisdiction over equitable disputes.

108

 So whether asserted as a claim or raised as a 

103 See D.I. 54 at 84 (Trial Tr.) (Sept. 14, 2021); see generally Del. Super. Ct. Civ. 

R. 12(h)(3) (requiring that any jurisdictional issue be raised sua sponte even if the 

parties do not raise it themselves). See also Stroud v. Milliken Enters., Inc., 552 

A.2d 476, 477 (Del. 1989) (dismissing appeal for lack of jurisdiction after the 

jurisdictional issue was raised by the Court at oral argument).

104 E.g., KT4 Partners LLC v. Palantir Techs. Inc., 2021 WL 2823567, at *24 (Del. 

Super. Ct. June 24, 2021) (articulating rule and collecting authority). 

105 Cf. Appriva S’holder Litig. Co., LLC v. EV3, Inc., 937 A.2d 1275, 1284 n.14 (Del. 

2007).

106 D.I. 58 at 27 (Def.’s Post-Trial Br.) (citing USH Ventures v. Glob. Telesys. Grp., 

Inc., 796 A.2d 7 (Del. Super. Ct. 2000)). But see Reybold Venture Grp. XI–A, LLC 

v. Atl. Meridian Crossing, LLC, 2009 WL 143107, at *3, *4 (Del. Super. Ct. Jan. 20, 

2009) (disapproving USH Ventures as “not support[ed]” by “Delaware case law” 

and observing that breach of fiduciary duty is a “cause of action, not a defense”); but 

see also NASDI Holdings, LLC v. N. Am. Leasing, Inc., 2019 WL 1515153, at *6 

n.47 (Del. Ch. Apr. 8, 2019) (disapproving USH Ventures for additional reasons).

107 E.g., McMahon v. New Castle Assocs., 532 A.2d 601, 603–05 (Del. Ch. 1987).

108 E.g., Dickerson v. Murray, 2015 WL 447607, at *3, *6–7 (Del. Super. Ct. Feb. 3, 

2015); accord Prospect Street Energy, LLC v. Bhargava, 2016 WL 446202, at *3–

6 (Del. Super. Ct. Jan. 27, 2016); see generally Monroe Park v. Metro. Life Ins. Co., 

457 A.2d 734, 738 (Del. 1983) (discussing the “historic and constitutional” bases for 

Delaware’s juridical separation of law from equity (first citing Del. Const. art. IV, 

§§ 7, 10; then citing 10 Del. C. §§ 341, 542 (2020))).
32

defense, the upshot is the same: the Company’s breach of fiduciary duty theory did 

not belong in this Court.109 Accordingly, the Court will not consider it further.

6. The Company failed to prove damages.110

Even if the Company had proved liability, it would not have proved damages.

The Company’s Agent Agreement and NDA defenses fit two remedial paradigms, 

respectively: recoupment and setoff. By definition, both require some proof of 

loss.111 Because of that, one might have supposed that the Company had articulated

an amount at which its alleged injuries lessened the outstanding Flat Fees and 

expenses and then proposed a counterbalance for the Court’s assessment that took

the difference.112 It did neither. Without evidence of a quantifiable injury, GVPGC

109 See Reybold, 2009 WL 143107, at *3 (“This Court will not exercise jurisdiction 

over a purely equitable cause of action exclusively within the jurisdiction of the 

Court of Chancery merely because it is coupled with an affirmative defense.”); see 

also Dickerson, 2015 WL 447607, at *6 (“[T]he nature of the remedy, in and of 

itself, is not dispositive in terms of jurisdiction . . . . Jurisdiction for a breach of 

fiduciary duty action is properly in the Chancery Court, even if only monetary 

damages are sought, because the claim arises out of a relationship that is equitable . 

. . .” (citations omitted)). E.g., Columbus Life Ins. Co. v. Wilmington Tr. Co., 2021 

WL 537117, at *8 (Del. Super. Ct. Feb. 15, 2021) (dismissing equitable contract

defenses for lack of jurisdiction); Sun Life Assurance Co. v. Wilmington Tr., Nat’l 

Ass’n, 2018 WL 3805740, at *3 (Del. Super. Ct. Aug. 9, 2018) (same).

110 This discussion does not capture GVPGC’s illegality defense, which sought 

avoidance as relief. 

111 See Recoupment, Black’s Law Dictionary (11th ed. 2019); Setoff, in id.

112 See Finger Lakes Cap. Partners, LLC v. Honeoye Lake Acquisition, LLC, 151 

A.3d 450, 453 (Del. 2016) (“Setoff and recoupment are different but related 

defenses. Set-off is a mode of defense by which the defendant acknowledges the 

justice of the plaintiff's demand, but sets up a defense of his own against the plaintiff, 

to counterbalance it either in whole or in part. Recoupment, on the other hand, is a 
33

could not have proved recoupment or setoff. Accordingly, GVPGC’s defenses 

would have failed for lack of damages. 

In sum, GVPGC breached the Agent Agreement and had no defenses to its 

breach. The Court therefore awards Balooshi the relief below. 

RELIEF AWARDED

In addition to $130,221.51 in damages, plus costs,113 Balooshi is entitled to 

pre- and post-judgment interest. He cannot, however, shift his attorney’s fees.

A. Balooshi Is Entitled to Pre- and Post-Judgment Interest At the Legal Rate

Delaware law awards pre-judgment interest as a matter of right.114 In contract 

actions, pre-judgment interest is computed from the date of the breach.115 Here, 

Balooshi essentially forgave the Company’s breaches until May 28, 2018—the date

he sent GVPGC his final invoice and began making unrequited demands for 

assurances. Accordingly, pre-judgment interest accrues as of May 28, 2018.

Where, as here, the parties’ contract does not supply an interest rate, a 

statutory interest rate applies instead. By statute, “the legal rate of interest shall be 

species of defense somewhat analogous to set-off in its character, the chief 

distinction, however, being that the defense of set-off arises out of an independent 

transaction, but the defense of recoupment goes to the reduction of the plaintiff's 

damages for the reason that he, himself, has not complied with the cross obligations 

arising under the same contract.” (internal quotation marks and citation omitted)).

113 Del. Super. Ct. Civ. R. 54(d).

114 E.g., Brandywine Smyrna, Inc. v. Millennium Builders, LLC, 34 A.3d 482, 486 

(Del. 2011).

115 E.g., Citadel Holding Corp. v. Roven, 603 A.2d 818, 826 (Del. 1992).
34

5% over the Federal Reserve discount rate including any surcharge” calculated from 

the date of the breach.116 This legal rate is simple and fixed.117 Accordingly, 

Balooshi is entitled to pre-judgment interest accruing as of May 28, 2018 at a simple, 

fixed rate of 5% over the Fed discount rate published at that time.

As to post-judgment interest, “Delaware law provides that [it] is a right 

belonging to the prevailing plaintiff . . . .”118 Post-judgment interest accrues “from 

the date of the judgment.”119 Again, unless the parties’ contract specifies otherwise, 

the rate is simple and fixed at 5% over the Federal Reserve discount rate published 

on the date the judgment is entered.

120

 Accordingly, Balooshi is entitled to postjudgment interest accruing as of the time this judgment is entered at a simple, fixed 

rate of 5% over the Fed discount rate published at the time of this judgment’s entry.

B. Balooshi Is Not Entitled to His Attorney’s Fees

Balooshi contends that GVPGC also must cover his attorney’s fees because it 

conducted this litigation in bad faith. As support for fee-shifting, Balooshi alleges 

discovery violations and argues that the Company reversed its pre-suit position—

116 6 Del. C. § 2301(a) (2020).

117 E.g., CIGNEX Datamatics, Inc. v. Lam Rsch. Corp., 2021 WL 212692, at *2 (D. 

Del. Jan. 21, 2021) (summarizing and applying Delaware prejudgment interest law); 

cf. Gotham Partners, L.P. v. Hallwood Realty Partners, L.P., 817 A.2d 160, 173 

(Del. 2002) (“Delaware courts have traditionally disfavored compound interest.”).

118 Wilmington Country Club v. Cowee, 747 A.2d 1087, 1097 (Del. 2000).

119 6 Del. C. § 2301(a).

120 Id.; see Noranda Aluminum Holding Corp. v. XL Ins. Am., Inc., -- A.3d --, 2021 

WL 5961628, at *4, *7 (Del. Dec. 16, 2021).
35

i.e., that Balooshi was not in breach—to mount dilatory and meritless defenses. 

Although the Company’s opposition was dubious and some of its discovery seemed 

questionable, the Court does not find that Balooshi has met the exacting standard for 

shifting his attorney’s fees.

Delaware follows the American Rule,121 under which “each party is normally 

obligated to pay . . . [its] own attorney’s fees, whatever the outcome of the 

litigation.”122 Courts, however, may vary the American Rule to sanction “bad faith” 

litigation conduct.123 The bad faith exception “deter[s] abusive litigation and . . . 

protects the integrity of the judicial process.”124 Using the bad faith exception, the 

Court may shift fees to a party who increased litigation costs by “bringing baseless 

claims or . . . through other” misconduct.125 The bad faith exception sets a high bar. 

Subjective culpability, not mere hard-dealing, is required, and the movant must 

adduce clear evidence of wrongdoing to succeed:

An award of fees for bad faith conduct must derive from either the 

commencement of an action in bad faith or bad faith conduct taken during 

litigation, and not from conduct that gave rise to the underlying cause of 

action . . . . [T]he bad faith exception applies only in extraordinary cases, 

and the party seeking [fees] must demonstrate by clear evidence that the party 

from whom fees are sought acted in subjective bad faith. [Delaware] courts 

have not settled on a singular definition of bad faith . . . but have found bad 

121 E.g., Mahani v. Edix Media Grp., Inc., 935 A.2d 242, 245 (Del. 2007).

122 Johnston v. Arbitrium (Cayman Is.) Handels AG, 720 A.2d 542, 545 (Del. 1998).

123 E.g., Brice v. Del. Dep’t of Corr., 704 A.2d 1176, 1179 (Del. 1998).

124 Montgomery Cellular Holding Co., Inc. v. Dobler, 880 A.2d 206, 227 (Del. 2005).

125 Blue Hen Mech., Inc. v. Christian Bros. Risk Pooling Tr., 117 A.3d 549, 559–60 

(Del. 2015).
36

faith where parties have unnecessarily prolonged or delayed litigation,

falsified records, or knowingly asserted frivolous claims. Further, [courts]

have recognized the bad faith exception where a party is found to have misled

the court, altered testimony, or changed position on an issue.126

Even so, the decision to shift fees is always up to the Court’s discretion.

127

The Court has reviewed all the evidence surrounding this issue and finds that 

Balooshi has not demonstrated GVPGC’s subjective bad faith by clear evidence. It 

is true, for example, that GVPGC produced two termination e-mails that bear some 

cosmetic dissimilarities and appear non sequitur to the messages underneath them. 

But the reason for those discrepancies might be technological and shifting fees 

because of them would be extreme absent clearer facts.128 Moreover, the Court 

understands that GVPGC did not fault Balooshi’s performance until he sued. But, 

before litigation, the Company was not represented by counsel, who may have 

advised it on defense theories of which it had not been aware.129 Under these 

126 RBC Cap. Mkts., LLC v. Jervis, 129 A.3d 816, 877 (Del. 2015) (cleaned up). 

127 Id. at 879.

128 See Johnston, 720 A.2d at 546 & n.27 (giving “falsified records” as an example 

of bad faith, but noting that “insufficient proof that [the] documents in question were 

falsified” counsels against fee-shifting (citation omitted)); see also Pettry v. Gilead 

Scis., Inc., 2021 WL 3087027, at *1 (Del. Ch. July 22, 2021) (observing that a 

“glaring egregiousness” standard is appropriate for assessing bad faith).

129 See Gen. Video Corp. v. Kertesz, 2009 WL 106509, at *1 (Del. Ch. Jan. 13, 2009) 

(explaining that the bad faith exception does not apply just because the losing party’s

“allegations were disproven at trial”); cf. Versata Enters., Inc. v. Selectica, Inc., 5 

A.3d 586, 607 (Del. 2010) (“Generally, the bad faith exception to the American Rule 

. . . does not apply to the conduct that gives rise to the substantive claim itself.” 

(internal quotation marks omitted)).
37

circumstances, the Court finds fee-shifting unwarranted.

130

 Accordingly, Balooshi’s 

request for fee-shifting is denied.

VERDICT

Having considered all the evidence, the Court finds in favor of Balooshi on 

his breach-of-contract claim and awards him $130,221.51 in damages, plus costs and 

pre- and post-judgment interest. The parties shall submit an appropriate form of 

order for the Court’s approval that implements this verdict, including the specific 

rates of interest calculated on the terms found applicable above, as a final judgment.

IT IS SO ORDERED.

Charles E. Butler, Resident Judge

130 See RBC Cap., 129 A.3d at 879 (observing that fee-shifting “is a matter . . . within 

the discretion of the trial judge” and explaining that a trial court does not “abuse [its] 

discretion” just because another court “may . . . come to a different conclusion”).