Opinion ID: 4076467
Heading Depth: 4
Heading Rank: 1

Heading: 1998 Dealer Agreement

Text: The 1998 contract’s choice of law provision provides that it is governed by Delaware law. In Delaware, the elements of a breach of contract claim are: “[1] the existence of the contract, whether express or implied; [2] the breach of an obligation imposed by that contract; and [3] the resultant damage to the plaintiff.” VLIW Tech., LLC v. HewlettPackard Co., 840 A.2d 606, 612 (Del. 2003). 32 Whereas the customer contracts referenced above in Part II.A.2 were for PBX systems, the dealer agreements between Avaya and TLI are worded broadly enough to reach both the PBX and PDS markets. Insofar as Avaya’s breach of contract allegations rely primarily on improper access to ODMCs and MSPs, however, the breach of contract claim is principally focused on the larger PBX market. 61 The signature page of the 1998 agreement evidences a contract between Lucent (Avaya’s predecessor) and TLI (referred to in the contract as the “Dealer”), satisfying the first element of the cause of action. Section 2.8 of the 1998 agreement provides, in part, as follows: Dealer may not market or sell Lucent Products to any Lucent BCS Global Account, or … the United States Government, and will use its best efforts to ensure that Dealer does not market to present direct customers of Lucent who are under warranty or with existing maintenance contracts for Lucent products or to any entity that is considering a proposal from Lucent for products or maintenance services, except that Dealer may respond to a request for competitive bids, proposals, or quotations even if Lucent is also responding. (J.A. 5905 (emphases added).) Avaya claims that TLI breached that “best efforts” clause by marketing and selling maintenance services to existing Lucent/Avaya customers. At trial, Douglas Graham admitted that TLI “marketed … to existing Avaya maintenance customers” in 2001, while the firm “was operating under the terms of the 1998 Lucent dealer agreement.” (J.A. 2704.) He also acknowledged a particular client to whom TLI had “marketed ... maintenance to replace existing Avaya maintenance.” (J.A. 2705.) In spite of what is arguably a clear violation of § 2.8 of the agreement, the District Court concluded that TLI’s 62 conduct “does not constitute a breach” because the Court interpreted § 2.8 to prohibit only the marketing of “Lucent Products,” a defined term that did not include maintenance. (J.A. 212.) That, however, is an overly cramped interpretation of the provision. Although a jury could perhaps import the “Lucent Products” language into the “best efforts” clause, that clause could just as easily support an interpretation that generally bars the marketing of maintenance to Lucent/Avaya customers. Indeed, the best efforts clause specifically prohibits marketing to Lucent/Avaya customers “with existing maintenance contracts ... or to any entity that is considering a proposal from Lucent for … maintenance services,” which strongly suggests that maintenance was part of the prohibition. (J.A. 5905.) The District Court therefore erred in assuming that “no reasonable jury” could have found a breach of § 2.8. (J.A. 213.) As to the final element, damages, we conclude that the same analysis for the earlier causes of action would have supported a jury finding that any profit that TLI gained by its breach of contract must have come, at least in part, at Avaya’s expense. Therefore, we conclude that a jury could reasonably have found all three elements of a breach of contract, and judgment as a matter of law was not proper.