Court Opinion

ID: 4655574
Source: CourtListenerOpinion
Date Created: 2021-01-28 22:02:56.5084+00
Date Added: 2024-06-11T08:00:22.511791
License: Public Domain

IN THE SUPREME COURT OF THE STATE OF DELAWARE

LCT CAPITAL, LLC,                          §
                                           §
       Appellant/Cross-Appellee,           §        Nos. 565, 2019
       Plaintiff below,                    §             568, 2019
                                           §
             v.                            §
                                           §        Court Below – Superior Court
NGL ENERGY PARTNERS LP and                 §        of the State of Delaware
NGL ENERGY HOLDINGS LLC,                   §
                                           §
       Appellees/Cross-Appellants,         §        C.A. No. N15C-08-109
       Defendants below.                   §
                                           §

                         Submitted: November 4, 2020
                          Decided:  January 28, 2021

Before SEITZ, Chief Justice; VALIHURA, VAUGHN, TRAYNOR,                        and
MONTGOMERY-REEVES, Justices, constituting the Court en Banc.

Upon appeal from the Superior Court. AFFIRMED IN PART, REVERSED IN PART.

Steven L. Caponi, Esquire, K&L GATES, LLP, Wilmington, Delaware; Roger R. Crane,
Esquire (argued), and Thomas A. Warns, Esquire, K&L GATES, LLP, New York, New
York; for Appellant/Cross-Appellee LCT Capital, LLC.

Steven T. Margolin, Esquire (argued) and Samuel L. Moultrie, Esquire, GREENBERG
TRAURIG, LLP, Wilmington, Delaware; Hal S. Shaftel, Esquire, Obiamaka P. Madubuko,
Esquire, and Daniel Friedman, Esquire, GREENBERG TRAURIG, LLP, New York, New
York; for Appellees/Cross-Appellants NGL Energy Partners LP and NGL Energy Holdings
LLC.
MONTGOMERY-REEVES, Justice, for the Majority:

       In 2014, appellant and cross-appellee LCT Capital, LLC (“LCT”) helped appellee

and cross-appellants NGL Energy Partners, LP and NGL Energy Holdings LLC

(collectively, “NGL”) acquire TransMontaigne, a refined petroleum products distributor.

LCT played an unusually valuable role in the transaction, bringing the sale to NGL’s

attention, helping NGL to understand opaque but profitable aspects of TransMontaigne’s

business, and enabling NGL to submit its winning bid outside of an auction process. The

transaction generated $500 million in value for NGL, more than double the $200 million

price that NGL paid to acquire TransMontaigne.

       LCT’s CEO Mike Krimbill represented on several occasions that LCT would receive

an unusually large investment banking fee, but the parties failed to reach an agreement on all

of the material terms. After negotiations broke down completely, LCT filed suit in the

Superior Court seeking compensation for its work under several theories, including quantum

meruit and common law fraud.

       At trial, LCT presented a unitary theory of damages that focused on the value of the

services that it provided, measured by the fee that Krimbill proposed for LCT’s work.

Nonetheless, the jury verdict sheet had two separate lines for damages awards, one for the

quantum meruit claim and another for the fraud claim. The jury found NGL liable for both

counts, awarded LCT an amount of quantum meruit damages equal to a standard investment

                                              1
banking fee, and awarded LCT a much larger amount of fraud damages approximately equal

to the unusually large fee that Krimbill proposed.

       Following post-trial briefing, the Superior Court set aside the jury’s awards and

ordered a new trial on damages. The court set aside the fraud award on the basis that the jury

impermissibly awarded LCT benefit-of-the-bargain damages in the absence of an

enforceable contract. The court set aside the quantum meruit award on the basis that

providing the jury with multiple damages lines for a unitary theory of damages was

confusing and may have caused the jury to spread a single award between the quantum

meruit and fraud claims.

       LCT and NGL both filed interlocutory appeals of the Superior Court’s order. On

appeal, LCT argues that benefit-of-the-bargain damages are available without an enforceable

contract. Thus, the Superior Court erred by setting aside the jury’s fraud award.

       On cross-appeal, NGL argues that the Superior Court erred by ordering a new trial on

damages because the jury’s quantum meruit award fully compensated LCT for its harm.

NGL also argues that it was entitled to judgment as a matter of law on the fraud claim.

Finally, NGL argues that the Superior Court provided the jury with erroneous fraudulent

misrepresentation jury instructions.

       Having reviewed the parties’ briefs and the record on appeal, and after oral argument,

this Court holds that LCT was not entitled to benefit-of-the-bargain damages and that the

Superior Court did not abuse its discretion by ordering a new trial on quantum meruit

                                              2
damages. Nonetheless, this Court also holds that the Superior Court abused its discretion by

ordering a new trial on fraud damages because LCT did not assert any independent damages

to support its fraud claim. Accordingly, the Court affirms in part and reverses in part the

Superior Court’s December 5, 2019 Memorandum Opinion.

I.     BACKGROUND

       A.     LCT Helps NGL Acquire TransMontaigne

       After a long career at major financial institutions, Louis Talarico founded LCT.1 LCT

is a Delaware limited liability company that provides investment banking and other financial

services related to transactions in the energy sector.2

       In December 2013, Talarico learned that Morgan Stanley planned to sell

TransMontaigne, a refined petroleum products distributor.3 Talarico was familiar with

TransMontaigne, thought that the sale would be an attractive investment, and began working

his contacts at Morgan Stanley to gain access to the sale process. 4

       After twice failing to arrange a successful bid with other buyers, Talarico approached

the Energy and Minerals Group (“EMG”), a substantial investor in NGL.5 EMG agreed that

TransMontaigne was an attractive target, but concluded that it lacked the ability to properly

run TransMontaigne and suggested that Talarico approach NGL’s CEO, Krimbill, about a

1
  Appendix to Opening Br. 375-76 (hereafter “A_”).
2
  See, e.g., A247-48.
3
  A388.
4
  A388-89, 95-98.
5
  See Appendix to Answering Br. 1534 (hereafter “B_”).

                                               3
partnership.6 Krimbill expressed interest in acquiring TransMontaigne and began working

with Talarico, the UBS Group, and others to construct a winning bid.7

       In May 2014, NGL submitted a winning bid of approximately $200 million to

purchase all of TransMontaigne.8 The deal successfully closed in July 2014.9

       Talarico played a “critical role” in the acquisition,10 enabling NGL to submit its

winning bid “outside of an auction process” and allowing NGL to acquire TransMontaigne

for “the very attractive purchase price of $200 million” when “[o]ther potential buyers . . .

were estimated to be offering $450 million . . . .”11 Further, Talarico helped NGL identify

and correct a problem with how Morgan Stanley treated TransMontaigne’s working capital,

an important component to valuing the company.12

       Talarico also helped NGL understand the value of TransMontaigne’s marketing

business. TransMontaigne was comprised of two business segments, a “hard asset business”

and a “marketing” business.13        Although Morgan Stanley wanted to sell all of

TransMontaigne for regulatory reasons, most buyers were only interested in the hard asset

6
  B1540-43.
7
  See B1768-69.
8
  See, e.g., A231.
9
  A236.
10
   A1261.
11
   A1261; A236.
12
   See, e.g., A462-73.
13
   A407-08.

                                             4
business.14 Talarico recognized that this piecemeal approach was a mistake because the

marketing business could generate substantial cash flows for a suitable acquirer.15

       Acquiring TransMontaigne created approximately $500 million of value for NGL.16

According to a letter that Krimbill drafted months after closing, NGL “would never have had

the opportunity to purchase TransMontaigne Inc. for $200 million” without LCT’s help.17

       B.      The Fee Negotiations Break Down

       Talarico and Krimbill did not reach an agreement on LCT’s fee before the transaction

closed. In May 2014, Talarico proposed that LCT receive a 15% ownership interest in

TransMontaigne, an option to purchase an additional 10%, and a gross-up payment to cover

taxes.18 NGL countered by offering a 2% interest in the NGL GP.19

       According to Talarico’s trial testimony, Krimbill thought that NGL’s counteroffer was

too low and verbally agreed to push NGL to offer LCT: (i) a 2% ownership interest in NGL,

(ii) a tax gross-up payment, and (iii) an option to purchase an additional 3% ownership

interest in NGL for $21 million.20 Assuming that NGL GP was worth $1 billion following

the TransMontaigne acquisition, this offer would equate to a fee worth approximately $43.8

14
   A406-10.
15
   See id.
16
   A236.
17
   Id.
18
   A521-22.
19
   A226.
20
   See, e.g., A563-64.

                                             5
million including the tax gross-up payment, or approximately $29 million without the tax

gross-up payment.21

       The record contains some uncertainty regarding the existence and details of this

verbal offer. Krimbill testified that he never made such an offer.22 Further, Talarico wrote a

contemporaneous message that can be read to suggest that Krimbill offered a mandatory

buy-in of $21 million for a 5% ownership stake, not an automatic 2% ownership stake with

an option to purchase an additional 3% stake.23

       In June 2014, Talarico, Krimbill, NGL’s outside counsel Bruce Toth, and others met

to discuss the TransMontaigne transaction. According to Talarico’s trial testimony, during

the meeting Krimbill introduced Talarico to Toth, told Talarico that Toth “does all my [NGL]

GP transactions,” and instructed Toth that “for Lou [Talarico] and his partners . . . here’s what

we’re going to do. We’re going to give them 2 percent interest in the GP. We’re going to

pay their taxes. . . . [A]nd we’re going to give them an option on another 3 percent at [a]

$700 million” valuation.24 Busy with finalizing the acquisition, Toth asked Talarico to send

the details in an email.25

21
   See, e.g., A1119-47.
22
   See A1197-200.
23
   See B1762.
24
   A564.
25
   A939.

                                               6
       The next day, Talarico sent Toth an email providing the details of the fee transaction

that Krimbill purportedly proposed.26 Talarico’s email noted that “there will be other details

to figure out.”27 Talarico did not copy anyone else on the email,28 and Toth did not respond.29

       A couple of weeks later Talarico called Toth to check-in on the fee transaction.30 Toth

told Talarico that “we are working on it,” or words to that effect.31 Despite this statement,

Toth testified that his team “was not working on documentation” regarding LCT’s fee at that

time. Instead, Toth testified that his team was “working” with Krimbill and NGL “on the

process of structuring a transaction.”32

       A few days later, Talarico sent Toth a follow-up email stating, “Mike [Krimbill] had

indicated that I reach out to you to start the process of figuring out how we properly paper

our GP interest—both 2% fee and 3% buy-in.”33 Talarico wrote that he was “open” to any

thoughts that Toth had on structuring the transaction.34 Talarico also acknowledged that he

“briefly read thr[ough] the amended LLC agreement . . . and appreciate that there may be

some steps or a process that NGL needs to complete for this all to happen.”35 LCT and NGL

26
   A230.
27
   Id.
28
   Id.
29
   See A941.
30
   See A949.
31
   Id.
32
   A950.
33
   B1811.
34
   Id.
35
   Id.

                                              7
did not make any more progress on the fee arrangement before NGL closed the

TransMontaigne acquisition.

       For the better part of the next year, Krimbill and Talarico engaged in increasingly

contentious negotiations, failing to agree on the details of LCT’s fee. For example, in May

2014 Krimbill refused to offer a tax gross-up payment and deleted a “tax catch-up” figure

from a spreadsheet that Talarico shared.36 Nonetheless, Talarico testified at trial that “we

made it very clear at the beginning that any fee compensation involving equity needed to

have a tax gross-up associated with it.”37

       In October 2014, Krimbill sent a letter to NGL’s owners regarding fees related to the

TransMontaigne acquisition.38 The letter proposed that NGL offer LCT a 5% ownership

stake in exchange for a $21 million mandatory buy-in. Krimbill wrote,

              We are asking for a compensation arrangement for LCT as we
              would have never had the opportunity to purchase
              TransMontaigne Inc. for $200 million or a 3.0x multiple of
              EBITDA without them. We are proposing that LCT acquire 5%
              for [sic] our NGL General Partner for a $21 million purchase
              price.

              ....

              This equates to a $29 million success fee which appears to be
              high compared to a typical 1%-2% investment banker success
              fee. We are looking at the fee from the perspective of the value
              created to the NGL General Partner and the very attractive
              purchase price of $200 million. LCT was able to get [Morgan

36
   Compare B1763-64 (including tax gross-up) with B1766-67 (deleting tax gross-up).
37
   A528.
38
   A236.

                                              8
              Stanley] to deal directly with NGL outside of an auction process
              which may have saved us tens of millions of dollars. Other
              potential buyers . . . were estimated to be offering $450 million,
              per the Wall Street Journal.39

Thus, the parties seem to have backed away from the 2% ownership stake with the option to

purchase an additional 3% that Talarico claimed that Krimbill offered LCT in May. The

parties also failed to determine what type of interest LCT would receive in NGL GP40 and

did not settle whether LCT would agree to an extended period of service.41

       In November 2014, Krimbill backed away from offering LCT a 5% ownership stake

for $21 million and pushed for a lower fee. 42 Negotiations eventually broke down, and

Krimbill told Talarico “if you want your fee, you have to sue me.”43

       C.     LCT Capital Files Suit in the Superior Court

       In August 2015, LCT filed its initial complaint in the Superior Court.44 LCT filed an

amended complaint in September 2015, alleging three counts.45 Count I alleged that NGL

breached a contract that “would pay LCT with a fee consisting of (i) a 2% ownership interest

in NGL Holdings at a $700 million valuation, with LCT’s taxes to be paid by NGL; and (ii)

the option to purchase an additional 3% ownership interest in NGL Holdings at a

39
   Id. (emphasis added).
40
   See B1811 (expressing uncertainty about how to structure the equity transaction).
41
   A1016-17.
42
   A587.
43
   Id.
44
   See LCT Cap., LLC v. NGL Energy P’rs, 2019 WL 6896463, at *1 (Del. Super. Dec. 5, 2019).
45
   See A239.

                                              9
$700 million valuation.”46 In other words, Count I alleged that LCT and NGL formed an

oral contract based on the fee that Krimbill purportedly offered Talarico in May 2014.

       Count II alleged both quantum meruit and unjust enrichment claims on the basis that

NGL knowingly accepted LCT’s investment advising services without compensation.47

       Count III alleged that NGL committed common law fraud because,

               Mr. Krimbill, acting in his capacity as Chief Executive Officer
               of NGL and a Director of NGL Holdings, represented to LCT
               that it would receive a 2% ownership interest in NGL Holdings
               at a $700 million valuation, with LCT’s taxes to be paid by
               NGL, and the option to purchase an additional 3% ownership
               interest in NGL Holdings at a $700 million valuation, as a fee
               for its services . . . .48

       In July 2018, the Superior Court granted NGL’s motion for summary judgment and

dismissed both the breach of contract and unjust enrichment claims.49 Regarding the breach

of contract claim, the court held that the parties did not form an oral contract because “neither

party manifested objective assent” and “the essential terms were not sufficiently definite to

determine a breach and an appropriate remedy. . . . LCT’s finder’s fee was never fully

defined nor were the obligations Plaintiff was required to meet to be entitled to a fee. . . .”50

       The court cautioned that its order dismissing LCT’s breach of contract claim

46
   A291.
47
   A295-96.
48
   A296-97.
49
   A305.
50
   A325-27 (citing Eagle Force Hldgs., LLC v. Campbell, 2018 WL 2351326, at *15 (Del. May 24,
2018); Osborn ex rel. Osborn v. Kemp, 991 A.2d 1153, 1158 (Del. 2010)).

                                               10
              [was] in no way implying that the conversations, discussions,
              communications and emails between the parties and their
              representatives are no longer relevant. They are. If the CEO of
              NGL made representations that he believed the compensation
              package suggested by LCT was fair and appropriate and was
              working toward accomplishing it, those comments are relevant
              to the quantum meruit claim. If there are discussions with
              NGL’s counsel regarding the alleged terms, those discussions
              and correspondence are relevant.51

       The court also dismissed the unjust enrichment claim on the basis that LCT’s

amended complaint improperly pled quantum meruit and unjust enrichment as a single claim

and that LCT could not obtain unjust enrichment because it had adequate legal remedies.52

       D.     The Superior Court Trial

       The Superior Court held a jury trial beginning in July 2018.53 At the close of

evidence, NGL moved for judgment as a matter of law, raising two arguments.54 First, NGL

argued that only the quantum meruit claim should go to the jury because LCT presented a

unitary damages claim for both counts and NGL admitted liability for the quantum meruit

claim.55 Second, NGL argued that LCT failed to present sufficient evidence establishing the

elements of fraud and instead attempted to bootstrap a fraud claim to facts establishing, at

most, an ordinary breach of contract or quantum meruit claim.56

51
   A328-29 (emphasis added).
52
   A330.
53
   LCT, 2019 WL 6896463, at *1.
54
   See A1278-87.
55
   A1283-84.
56
   A1284-85.

                                            11
       The court seemed to agree that LCT presented a unitary damages case, observing that

“the damages are the damages whether it’s quantum meruit or its fraudulent

misrepresentation. There’s been no evidence separating them. They’re the same.”57

Nonetheless, the court determined that it could avoid the risk of double-counting damages

by giving the jury one damages line for both counts.58

       The court also rejected NGL’s argument that LCT failed to present sufficient evidence

to establish fraud, stating “[d]o I think the fraudulent misrepresentation case is a smoking

gun? No. Do I think there’s sufficient evidence to allow it to go to the jury? Yes.”59

       The court also denied a separate motion by LCT to amend the fraud claim to seek

punitive damages, holding

              I don’t find this to be a case where punitive damages [are]
              warranted.

              ....

              Do I think this is an unfortunate common circumstance in the
              world of corporate business? Yes. Do I like it? No. Do I wish
              . . . there w[ere] greater ethics in America? . . . [Y]es.

              But . . . this is not that case [where punitive damages are
              warranted]. At the end of the day this is a dispute between two
              very high-powered ego people who have different opinions
              about what was agreed to. And I’m not going to make it
              something more than what it is.60

57
   A1295.
58
   A1296.
59
   Id.
60
   A1300.

                                             12
         Thus, the Superior Court sent both the fraudulent misrepresentation and quantum

meruit claims to the jury. The Superior Court made two key decisions when sending the

case to the jury. First, the court provided the jury with the following (excerpted) instruction

for fraudulent misrepresentation.

                The second claim alleges fraudulent misrepresentation. In order
                to establish the claim of fraudulent misrepresentation, LCT must
                prove the following by a preponderance of the evidence:

                1) NGL made false representations of material facts that are
                important to LCT;

                2) that NGL had knowledge or belief that these representations
                were false, or were made with reckless indifference to the truth;

                3) the misrepresentations were made with the intent to induce
                LCT to act or to decline to act on the false representations;

                4) that LCT justifiably relied on the false representation; and

                5) as a result of that reliance, LCT suffered damages.

                ....

                NGL’s representation does not need to have been overt. Rather,
                NGL’s deliberate concealment of a material fact or silence in the
                face of a duty to speak is sufficient for a claim of intentional
                misrepresentation. Moreover, the term “misrepresentation” is
                sufficiently broad to encompass fraudulent, negligent, or even
                innocent statements.61

         Although the court instructed the jury that NGL was only liable if it acted with

knowledge or recklessness, the instruction also defined “misrepresentation” broadly to

61
     A1322-23 (emphasis added).

                                               13
include “negligent or even innocent statements.”62 NGL did not object to this jury

instruction, although it attempted unsuccessfully to add an instruction advising the jury not

to award damages for the dismissed breach of contract claim.63

       Second, the court reversed course on the single-damages-line approach and decided

to give the jury a verdict sheet providing separate damages lines for the quantum meruit and

fraudulent misrepresentation claims. The quantum meruit damages line appeared first and

asked, “What do you find to have been the fair value of the services that LCT provided to

NGL?”64 The jury answered “$4 million.”

       Next, the verdict sheet asked, “Do you find that LCT has proven by a preponderance

of the evidence its claim of fraudulent misrepresentation?”65 The jury answered “yes” with

a checkmark—finding that LCT proved fraud—and proceeded to the next question.

       The next question asked, “Are the damages for fraudulent misrepresentation the same

as those you found for quantum meruit?”66 The jury answered “no” with a checkmark—

finding that the damages were not the same for fraud and quantum meruit—and proceeded

to the final question.

62
   See id.
63
   See B2224 (“And we have three brief additional proposed instructions . . . . One is that the jury is
not ruling on a contract claim . . . .”); B2677.
64
   A1338.
65
   Id.
66
   Id.

                                                  14
       The final question asked the jury to “[s]tate the amount of your award of damages for

LCT’s claim of fraudulent misrepresentation.” The jury answered “$29 million.” The court

provided the jury with minimal guidance regarding how to measure fraud damages,

instructing the jury that “[i]f you find that LCT has met the elements of fraudulent

misrepresentation, you should determine the damages that LCT suffered that are a direct

result of the false misrepresentations.”67

       Thus, the jury found that: (i) the fair value of LCT’s services was $4 million, (ii) LCT

proved the elements of fraudulent misrepresentation, (iii) the damages for quantum meruit

and fraud were not the same, and (iv) NGL’s fraud caused LCT $29 million of damage.

       E.      The Superior Court Orders a New Trial on Damages

       After receiving the jury’s verdict, the Superior Court denied NGL’s motion for

judgment as a matter of law under Rule 50(a).68 The same day, NGL filed a renewed motion

seeking judgment as a matter of law under Rule 50(a) and a new trial under Rule 59.69 NGL’s

renewed motion raised three arguments. First, NGL argued that the jury improperly awarded

benefit-of-the-bargain damages in the absence of an enforceable contract regarding LCT’s

finder’s fee.70 Second, NGL argued that LCT failed to prove the elements of fraudulent

67
   A1323 (jury instructions sheet); see also B2624, at 127:17-20 (transcript of the court providing
the jury with an identical oral instruction).
68
   See A1340.
69
   See B2680-99.
70
   See B2689-92.

                                                15
misrepresentation.71 Third, NGL argued that because LCT presented a unitary damages

theory, the court should either limit LCT’s recovery to the jury’s $4 million quantum meruit

award or order a new trial on fraud damages with an instruction that the jury cannot award

benefit-of-the-bargain damages.72

       In December 2019, the Superior Court issued its Memorandum Opinion granting in

part and denying in part NGL’s renewed motion for judgment as a matter of law and for a

new trial. The court construed NGL’s motion as raising two issues. The first issue was

whether NGL was entitled to judgment as a matter of law because LCT failed to prove

fraud.73 The court denied the motion for judgment as a matter of law on the fraud claim,

holding that

               the jury agreed with Plaintiff that NGL, specifically Krimbill,
               misled Plaintiff on numerous occasions to believe a unique fee
               arrangement was both plausible and going to happen, and there
               was evidence that would clearly support this conclusion.
               Krimbill’s testimony was unbelievable, and it was supported by
               several other witnesses who were less than candid or credible.74

       The second issue was whether the Superior Court should order a new trial on damages

because the jury improperly awarded LCT benefit-of-the-bargain damages or was confused

regarding the proper damages award.75 Recognizing that the availability of benefit-of-the-

71
   See B2693-98.
72
   See B2696-98.
73
   LCT, 2019 WL 6896463, at *4.
74
   Id.
75
   Id. at *3.

                                             16
bargain damages was unsettled under Delaware law, the court surveyed non-controlling case

law that the parties cited and concluded that

                 to get damages under the benefit-of-the-bargain concept, the
                 contractual bargain must have been created and formalized. . . .
                 While perhaps incredibly unfair to the unique factual setting of
                 the case in light of the reprehensible conduct of the Defendants,
                 the Court must find you do not get the bargain if it is not clearly
                 created.76

          Nonetheless, the court held that a new trial on damages was needed because the

separate damages lines for quantum meruit and fraudulent misrepresentation

                 simply muddied the damage award to the point that it is
                 impossible to determine what the jury believed was a fair and
                 reasonable determination of the real damages here . . . .

                 The Court . . . has struggled to come up with a fair resolution of
                 this dispute. Unfortunately, the Court could foresee the
                 possibility that if a single damage figure was requested, the jury
                 could have decided the compensation agreed to by Krimbill of
                 more than $29 million was the fair and reasonable
                 compensation for the unique serviced provided and [the jury]
                 only divided the damages on the verdict sheet because they were
                 requested to do so. On the other hand, perhaps they would have
                 accepted Defendants’ theory of a reasonable compensation of
                 the standard investment banker fee and only awarded $4
                 million. The Court is simply not willing to accept Defendants’
                 assertion that only the quantum meruit award here represents the
                 damages that the jury believed was fair compensation for the
                 unique services Plaintiff provided. Even Krimbill . . . believed
                 compensation beyond the norm was appropriate.77

76
     Id. at *7.
77
     Id. (emphasis added).

                                                 17
       Thus, the court ordered a new trial to determine the proper measure of damages but

upheld the jury’s finding that LCT proved its fraudulent misrepresentation claim.78

       F.      LCT and NGL File Interlocutory Appeals

       LCT and NGL both timely moved for leave to file an interlocutory appeal of the

Superior Court’s order.79 LCT sought to appeal the Superior Court’s determination that

benefit-of-the-bargain damages are unavailable for a fraud claim without an enforceable

contract.80 NGL sought to appeal the Superior Court’s determinations “setting aside . . . the

$4 million quantum meruit verdict, upholding . . . the jury instruction on fraudulent

misrepresentation, and ruling that the evidence supported the fraudulent misrepresentation

verdict.”81

       The Superior Court granted LCT’s request to certify an appeal regarding the

availability of benefit-of-the-bargain damages but denied NGL’s request to appeal regarding

“whether the jury instruction on fraudulent misrepresentation was correct and whether the

evidence supported LCT’s fraud claim.”82

       This Court agreed to hear interlocutory appeals on all of the issues that both parties

raised.83

78
   Id. at *7-8.
79
   Ex. B to Opening Br. 1.
80
   Ex. C to Opening Br. 2.
81
   Id. at 2-3.
82
   Id. at 3.
83
   Id. at 4.

                                             18
II.    STANDARD OF REVIEW

       “This Court reviews questions of law de novo.”84 This Court also reviews de novo

the trial court’s decision to deny judgment as a matter of law under Superior Court Civil

Rule 50.85 Judgment as a matter of law is appropriate if “there is no legally sufficient

evidentiary basis for a reasonable jury to find” for non-moving party.86 When considering a

motion for judgment as a matter of law, the Court must view the evidence and draw all

reasonable inferences “in a light most favorable to the non-moving party.”87 “The moving

party bears the burden of demonstrating both the absence of a material fact and entitlement

to judgment as a matter of law.”88

       This Court reviews the Superior Court’s decision to order a new trial for abuse of

discretion.89 When considering a motion for a new trial, the Superior Court “must give

84
   Klassen v. Allegro Dev. Corp., 106 A.3d 1035, 1043 (Del. 2014); see also Brigade Leveraged
Cap. Structures Fund Ltd. v. Stillwater Mining Co., 240 A.3d 3, 9 (Del. 2020) (“This Court reviews
errors of law de novo.”); DV Realty Advisors LLC v. Policeman’s Annuity and Benefit Fund of Chi.,
75 A.3d 101, 108 (Del. 2013).
85
   Blue Hen Lines, Inc. v. Turbitt, 787 A.2d 74, 77 (Del. 2001) (“This Court reviews de novo the
Superior Court’s decision to grant summary judgment under Super. Ct. Civ. R. 50.”).
86
   Super. Ct. Civ. R. 50(a).
87
   Blue Hen, 787 A.2d at 77 (“On appeal, the Court ‘must determine “whether the evidence and all
reasonable inferences that can be drawn therefrom, taken in a light most favorable to the non-moving
party, raise an issue of material fact for consideration by the jury.”’” (quoting Trievel v. Sabo, 714
A.2d 742, 744 (Del. 1998))).
88
   Id.
89
   See, e.g., O’Riley v. Rogers, 69 A.3d 1007, 1010 (Del. 2013).

                                                 19
‘enormous deference’ to the jury’s verdict,”90 and “should not set aside” the jury’s verdict

“unless . . . a reasonable jury could not have reached the result.” 91

       Regarding jury instructions, this Court “must reverse” a verdict “[w]here an

inaccuracy in the instructions may lead to confusion that undermines either the jury’s ability

to reach a verdict or our confidence in [the jury’s] ability to do so fairly under the

circumstances . . . .”92 “In evaluating the propriety of a jury charge, the jury instructions must

be viewed as a whole.”93 If a party fails to timely object to a jury instruction at trial, this

Court reviews the instruction for plain error.94 “[P]lain errors ‘undermine the jury’s ability

to intelligently perform its duty in returning a verdict.’ Thus, ‘an improper jury instruction

may amount to plain error despite a defendant’s acceptance of it.’”95

III.   ANALYSIS

       This appeal requires the Court to decide three issues. First, whether LCT could

receive benefit-of-the-bargain fraud damages even though the parties did not form an

enforceable agreement governing LCT’s fee. Second, whether the Superior Court abused

90
   Cuonzo v. Shore, 958 A.2d 840, 844 (Del. 2008) (quoting Young v. Frase, 702 A.2d 1234, 1236
(Del. 1997)).
91
   Storey v. Camper, 401 A.2d 458, 465 (Del. 1979).
92
   Banther v. State, 884 A.2d 487, 492-93 (Del. 2005) (citing Bordley v. State, 832 A.2d 1250 (Del.
2003)).
93
   Culver v. Bennett, 588 A.2d 1094, 1096 (Del. 1991) (citing Probst v. State, 547 A.2d 114, 119
(1988)).
94
   See, e.g., Riggins v. Mauriello, 603 A.2d 827, 830-31 (Del. 1992).
95
   Volkswagen v. Costello, 880 A.2d 230, 234-45 (Del. 2005) (quoting Culver, 588 A.2d at 1096;
Bullock v. State, 775 A.2d 1043, 1054 (Del. 2001)).

                                                20
its discretion by ordering a new trial on damages for LCT’s fraudulent misrepresentation

claim. Third, whether the Superior Court abused its discretion by ordering a new trial on

damages for LCT’s quantum meruit claim.96

       We address each issue in turn.

       A.      LCT Could Not Obtain Benefit-of-the-Bargain Damages

       Under Delaware law, “[t]he damages available for deceit or fraudulent

misrepresentation are generally limited to those which are the direct and proximate result of

the false representation . . . .”97 The scope of fraud damages is broad, allowing “[a] plaintiff

. . . [to] recover for any injury resulting from the direct and natural consequences of [the

plaintiff] acting on the strength of the defendant’s statements,” provided that such injuries

were “within [the defendant’s] contemplation when the fraud was committed.”98

       Delaware law recognizes two primary approaches for measuring the harm that the

defendant’s fraud proximately caused, benefit-of-the-bargain damages and out-of-pocket

96
   NGL also argues that the Superior Court erred by refusing to dismiss the fraud claim because LCT
failed to prove reliance, Answering Br. 54, and that this Court should set aside the jury’s award
because the Superior Court provided the jury with erroneous instructions regarding the elements of
a fraud claim, id. at 60. We need not reach either argument, however, because we hold that LCT’s
fraud claim failed for a separate reason. See infra III.B.
97
   Harman v. Masoneilan Int’l, Inc., 442 A.2d 487, 499 (Del. 1982) (citing Poole v. N.V. Deli
Maatschappij, 224 A.2d 260 (Del. 1966)); see also Brzoska v. Olson, 668 A.2d 1355, 1367 (Del.
1995) (“In general, a recovery for fraudulent misrepresentation is limited to economic damages, i.e.,
those damages which are the direct and proximate result of the false representation consisting of the
loss of bargain or actual out of pocket losses.”) (citations omitted); Stephenson v. Capano Dev., Inc.,
462 A.2d 1069, 1077 (Del. 1983) (“Of course the defendant’s liability extends only to any injury to
the plaintiff which was within his contemplation when the fraud was committed.”) (citations
omitted).
98
   Stephenson, 462 A.2d 1077 (citations omitted).

                                                  21
damages.99 Benefit-of-the-bargain damages are equal to “the difference between the actual

and the represented values of the object of the [fraudulent] transaction.”100 Awarding benefit-

of-the-bargain damages “put[s] the plaintiff in the same financial position that [the plaintiff]

would have been in if the defendant’s representations had been true.”101 Out-of-pocket

damages are equal to “the difference between what [the plaintiff] paid and the actual value

of the item” that the plaintiff received.102 Awarding out-of-pocket damages “restore[s] the

plaintiff to [their] financial position before the transaction occurred.”103

       Regardless of the approach taken, the goal is the same—to remedy injuries that the

fraud proximately caused. Thus, the “‘plaintiff is entitled to compensation to make [the

plaintiff] whole, but no more.’ In other words, the remedy for the tort should put the plaintiff

as close as possible to the same position as she was in before the injury.”104

       The Superior Court held that LCT cannot recover benefit-of-the-bargain damages

because the parties did not form an enforceable contract regarding LCT’s fee.105 LCT argues

that this ruling is contrary to binding Delaware Supreme Court authority and other non-

99
   Id. at 1076 (citations omitted).
100
    Id. (citations omitted).
101
    Id.
102
    Id. (citations omitted).
103
    Id.
104
    Stayton v. Del. Health Corp., 117 A.3d 521, 534 (Del. 2015) (quoting Mitchell v. Haldar, 883
A.2d 32, 38 (Del. 2005)).
105
    LCT, 2019 WL 6896463, at *7.

                                               22
Delaware case law.106 NGL responds that the Superior Court’s holding is consistent with

Delaware case law and other non-Delaware case law.107

               1.       Existing Delaware case law does not clearly answer whether
                        benefit-of-the-bargain damages require an enforceable agreement

       Both LCT and NGL point to Delaware case law in support of their positions regarding

whether a plaintiff may receive benefit-of-the-bargain damages for a fraud claim without an

enforceable contract.

       LCT argues that benefit-of-the-bargain damages are available without an enforceable

contract under this Court’s holding in Stephenson.108 In Stephenson, the plaintiff entered into

a contract to purchase a townhome relying on the defendant’s separate and fraudulent

promise to offer low-interest financing when prevailing mortgage interest rates were high.109

The parties did not form an enforceable financing agreement.110 Nonetheless, the Court held

that the plaintiff could recover the benefit of the low-interest financing bargain because “the

increased financing costs” that the plaintiff faced on the open market were “a direct and

proximate result of [the defendant’s] misrepresentations.”111

       The Court noted,

               At the time of this transaction it is conceivable that if the
               relatively low-interest mortgages were not available, a buyer,

106
    Opening Br. 19-42.
107
    Answering Br. 23-47.
108
    See, e.g., Opening Br. 21.
109
    462 A.2d at 1076.
110
    Id.
111
    Id. at 1077.

                                              23
              who would have to obtain a mortgage with a higher interest rate
              and possibly a greater down payment, may have found little or
              no attraction for this property. In the abstract that sounds
              speculative, but as to this plaintiff, . . . that situation was very
              real. She consistently made known her desire to buy this
              [town]house because of the favorable mortgage terms that [the
              defendant] said were available.112

       In reaching that conclusion, the Court stated that “[t]he most common and accepted

standard [of fraud damages] is the benefit of the bargain rule.”113 However, in Stephenson

“[t]he financing plans involved . . . c[ould] not be regarded as independent and divisible from

the sale of the . . . townhouse.”114 Thus, Stephenson does not address whether a plaintiff can

receive benefit-of-the-bargain damages where that bargain is not connected to an enforceable

contract, as is the case with LCT’s fee.115

       NGL responds that “Delaware courts have . . . held that a plaintiff may recover

additional benefit-of-the-bargain damages for fraud only where the plaintiff was ‘induce[d]

to form a contract.’”116 NGL relies heavily on the Court of Chancery’s opinion in

Shuttleworth, which NGL claims establishes that benefit-of-the-bargain damages require an

enforceable contract.117 In Shuttleworth, the plaintiff claimed that she contributed a

disproportionate share of her income to support her household in reliance on her husband’s

112
    Id.
113
    Id. at 1076.
114
    Id. at 1075.
115
    See, e.g., A325-27.
116
    Answering Br. 24 (quoting Shuttleworth v. Abramo, 1994 WL 384428, at *6 (Del. Ch. July 14,
1994)).
117
    Answering Br. 33.

                                              24
promise that he would leave the plaintiff all of his property upon his death.118 The court had

previously ruled that the statute of limitations prevented the plaintiff from bringing a breach

of contract claim on the husband’s promise.119

       The court held that the plaintiff was not entitled to any damages because she “was not

in fact financially injured.”120 Instead, the plaintiff “had already received, by operation of

law or distributions from her husband’s estate, property far in excess” of the amount of her

disproportionate contributions to the household.121 In reaching that conclusion, the court

stated that because “the plaintiff’s suit to enforce the alleged contract is time-barred, . . . [t]he

remedy for the remaining fraud claim, if there is to be one, is restricted to restitution, through

which the court must endeavor to restore the plaintiff to her position prior to her husband’s

alleged misrepresentations, or actual damages.”122 We agree that Shuttleworth can be read

to hold that benefit-of-the-bargain damages are unavailable without an enforceable contract,

but we note that Shuttleworth addresses a unique factual context.123

       The other Delaware decisions that the parties cite either expressly state that benefit-

of-the-bargain damages are available where the fraud induced the plaintiff to form a separate

118
    1994 WL 384428, at *4.
119
    See id.
120
    Id. at *5.
121
    Id. at *7.
122
    Id. at *6.
123
    See id.

                                                 25
contract or suggest without squarely holding that benefit-of-the-bargain damages require an

enforceable contract.124

               2.      Non-Delaware case law reveals diverging approaches to whether
                       benefit-of-the-bargain damages require an enforceable agreement

       The parties also rely on non-Delaware case law to support their positions. Many

courts have held that a plaintiff cannot recover benefit-of-the-bargain tort damages without

an enforceable contract.125 For example, in Roboserve, Inc. v. Kato Kagaku Co., Ltd, the

Seventh Circuit held that under Illinois law

               [w]here a misrepresentation induced the victim to consummate
               the bargain, benefit-of-the-bargain damages are appropriate . . .
               . Such damages are clearly not appropriate, however, in the
               absence of an actual, binding agreement. Damages for common
               law fraud are not intended to restore what one never had.126

124
    See, e.g., E.I. DuPont De Nemours & Co. v. Fla. Evergreen Foliage, 744 A.2d 457, 457 (Del.
1999) (“[U]nder Delaware law, a tort claimant fraudulently induced to execute a release may opt
either for recession or a separate suit for fraud with damages calculated on the difference between
that received under the release and the value of the settlement or recovery achieved had there been
no fraud by the released party.”); Manzo v. Rite Aid Corp., 2002 WL 31926606, at *5 (Del. Ch. Dec.
19, 2002) (“[P]laintiff asserts that she is entitled to ‘benefit of the bargain damages.’ The amended
complaint fails to articulate any specific bargain from which these benefits purportedly flow and,
therefore, does not state a cognizable injury.” (internal quotation marks omitted)), aff’d 825 A.2d
239 (Del. 2003); Clark v. Teeven Hldg. Co., 625 A.2d 869, 877 (Del. Ch. 1992) (“A defrauded party
may elect to affirm the challenged contract and seek money damages. He then has an action at law
for the tort of deceit.”) (citing Hegarty v. Am. Commonwealths Power Corp., 163 A. 616, 619 (Del.
1932); Mackenzie Oil Co. v. Omar Oil & Gas Co., 154 A. 883, 891 (Del. 1929)); Tam v. Spitzer,
1995 WL 510043, at *10 (Del. Ch. Aug. 17, 1995) (“Where, as here, a party is fraudulently induced
to enter into a contract, the defrauded party may elect either to affirm the contract and sue at law for
money damages, or disaffirm and seek recission in equity.” (citations omitted)).
125
    See generally Answering Br. 22-41 (collecting cases).
126
    78 F.3d 266, 274 (7th Cir. 1996).

                                                  26
Similarly, in Bohnsack v. Varco, L.P., the Fifth Circuit held that under Texas law “benefit-of-

the-bargain damages compensate litigants only for injuries that arise out of an enforceable

contract” and are therefore generally unavailable for common law fraud claims.127

       On the other hand, there is authority allowing a plaintiff to recover benefit-of-the-

bargain damages without an enforceable contract.128 For example, in Lewis v. Citizens

Agency of Madelia, Inc., the Minnesota Supreme Court held that the plaintiff could recover

the life insurance proceeds under a life insurance policy that the insurer never issued.129 The

plaintiff’s husband applied for a life insurance policy, naming the plaintiff as the

beneficiary.130 For reasons unknown, the insurer never issued the policy.131 Nonetheless,

insurance agents falsely told the plaintiff on several occasions that the policy would provide

a death benefit.132

       The plaintiff detrimentally relied on these misrepresentations by continuing to pay the

premiums owed under the policy, taking out a loan, and making other financial decisions

under the assumption that the policy would pay a death benefit.133 The plaintiff did not

127
    668 F.3d 262, 277 (5th Cir. 2012) (citation omitted).
128
    See generally Opening Br. 33-38 (collecting cases); Reply Br. 22-27 (same).
129
    306 Minn. 194, 200-01 (1975).
130
    Id. at 196.
131
    Id.
132
    Id. at 196-99.
133
    See, e.g., id. at 200-01.

                                               27
discover that the life insurance policy was invalid until her husband died, at which point it

was too late to obtain alternative coverage.134

        The Minnesota Supreme Court acknowledged that “a return of the out-of-pocket

damages will, in most cases, return the injured party to the exact same position she would

have been in, but for the misrepresentation.”135 Nonetheless, the Court held that on these

facts, the plaintiff

                cannot be made whole by a mere return of the premiums, since
                in the interim her husband became definitely uninsurable and
                died thereafter. . . .

                Thus, . . . it seems reasonable to us that the natural and proximate
                loss suffered by [the plaintiff] was the life insurance proceeds
                she expected to receive upon her husband’s death and not
                merely the premiums supporting the policy.136

                3.     LCT cannot receive benefit-of-the-bargain damages to protect its
                       expectation interest in NGL’s false promises

        At first blush, the above discussion might suggest that it is difficult to identify a

universal approach to measuring a plaintiff’s damages in this context. Nonetheless, we think

that the principles underlying tort damages reveal more consistency than an initial reading of

the case law might suggest. The purpose of tort damages is to compensate the plaintiff for

the harm that the defendant’s tortious conduct proximately caused.137 Where the defendant’s

134
    Id. at 197.
135
    Id. at 200.
136
    Id. at 200-01.
137
    See, e.g., Harman, 442 A.2d at 499; Brzoska, 668 A.2d at 1367.

                                                28
fraud did not induce the plaintiff to form a contract, out-of-pocket damages typically measure

the full scope of plaintiff’s injuries. Stated differently, out-of-pocket damages typically

would remedy the natural and proximate loss sustained by a party due to reliance on a

misrepresentation. This rule focuses on the operative inquiry under tort law—what was lost

by reason of the deception, or what compensation is necessary to make the plaintiff whole.

Thus, in the absence of an enforceable contract, the default remedy for fraud is out-of-pocket

damages.

          Cases like Lewis and Stephenson show that there are some circumstances, however,

where out-of-pocket damages would not make the plaintiff whole. In these rare cases,

benefit-of-the-bargain damages may be appropriate even though the parties did not form an

enforceable agreement. But even in these unusual circumstances, benefit-of-the-bargain

damages serve the same function as out-of-pocket damages: to compensate the plaintiff for

the harm that the defendant’s fraud proximately caused. In Lewis and Stephenson benefit-

of-the-bargain damages were appropriate because out-of-pocket damages would not capture

the harm that the plaintiffs suffered by reasonably and foreseeably relying on the defendants’

misrepresentations to make other decisions, such as buying property relying on the

defendant’s fraudulent promise to offer low-interest financing,138 or choosing not to search

for alternative life insurance coverage relying on the defendant’s misrepresentations that a

138
      See Stephenson, 462 A.2d at 1076.

                                             29
life insurance policy would pay a death benefit.139 The key point is that in these rare cases,

benefit-of-the-bargain damages were necessary to compensate the plaintiff for harm that the

plaintiff suffered by relying on the defendant’s fraud, not to protect the plaintiff’s expectation

interest in the defendant’s false promises.

       With these principles in mind, the question on appeal is whether this is the rare case

where, despite the absence of an enforceable agreement, benefit-of-the-bargain damages are

needed to make the plaintiff whole. Stated differently, did LCT seek benefit-of-the-bargain

damages to provide compensation for harm that out-of-pocket damages would not measure?

Or did LCT seek benefit-of-the-bargain damages to protect its expectation interests in NGL’s

false representations? If the later, LCT cannot receive benefit-of-the-bargain fraud damages.

       Having reviewed the record, it appears that LCT presented a unitary theory of

damages below that focused exclusively on the value of the services that it provided without

compensation.140 LCT did not present evidence of other types of actual damages.141

       Given this unitary approach, out-of-pocket damages equal to the value of the services

that LCT provided without compensation would compensate LCT for all of the harm that

NGL’s fraud proximately caused. It therefore appears that LCT seeks benefit-of-the-bargain

damages solely to protect its expectation interests in the bargain that Krimbill proposed but

139
    See Lewis, 306 Minn. at 200-01.
140
    See, e.g., A1295 (“[T]he damages are the damages whether it’s quantum meruit or its fraudulent
misrepresentation. There’s been no evidence separating them. They’re the same.”).
141
    See, e.g., id.

                                               30
the parties never formed because they could not agree on all of the material terms. That is a

remedy that LCT cannot receive.

       We also note the difficulty of fairly and accurately valuing the benefit of a bargain

that the parties never formed. Even if the details of Krimbill’s offer are ascertainable,142 we

do not know what terms the parties would have agreed to because the parties never agreed

to all of the material terms of LCT’s fee.143 Given this uncertainty, it is unclear how LCT

could have provided the jury with a reasonable basis for inferring the value of the

hypothetical bargain to which LCT and NGL would have agreed. This uncertainty also

creates a risk that benefit-of-the-bargain damages would provide LCT with a windfall by

awarding LCT with the benefit of a generous bargain to which NGL would not have agreed.

Such a windfall would be contrary to Delaware law.144

       Accordingly, we affirm the Superior Court’s holding that LCT cannot receive benefit-

of-the-bargain damages on the facts of this case.145

142
    See, e.g., A236 (Krimbill’s letter to NGL’s stockholders suggesting that LCT receive a “success
fee” worth approximately $29 million).
143
    A325-27.
144
    See, e.g., Stayton, 117 A.3d at 534 (“In Delaware, ‘a plaintiff is entitled to compensation to make
him whole, but no more.’ In other words, the remedy for the tort should put the plaintiff as close as
possible to the same position as she was in before the injury.” (quoting Mitchell v. Haldar, 883 A.2d
32, 38 (Del. 2005))).
145
    Because we hold that LCT cannot receive benefit-of-the-bargain damages on the facts of this
case, we need not address NGL’s argument that LCT is estopped from seeking benefit-of-the-
bargain damages. Answering Br. 23, 28-29.

                                                  31
               4.      LCT’s other arguments in favor of benefit-of-the-bargain
                       damages are unpersuasive

       LCT raises four more sub-issues that we must briefly address. First, LCT argues that

“[i]t would be completely inconsistent and inappropriate for benefit of the bargain damages

to be available for promissory estoppel claims in the absence of a contract but not for” fraud

claims.146 We think that LCT draws a false parallel between promissory estoppel and fraud.

Promissory estoppel is a quasi-contract doctrine that protects different interests than common

law fraud.147 It is therefore unremarkable that a plaintiff might be entitled to different

remedies for these different causes of action.

       Second, LCT argues that it should not be punished for the lack of a written contract

because NGL’s fraud caused the parties to not form a written agreement.148 But, as the

Superior Court held, there was no written agreement because the parties never agreed to the

material terms of LCT’s fee.149 Thus, the parties’ failure to agree caused the lack of a written

agreement, not NGL’s fraudulent misrepresentations.

146
    Id. at 30.
147
    See, e.g., Windsor I, LLC v. CWCapital Asset Mgmt. LLC, 238 A.3d 863, 876 (Del. 2020) (“To
state a claim for promissory estoppel, a plaintiff must prove by clear and convincing evidence that:
‘(i) a promise was made; (ii) it was the reasonable expectation of the promisor to induce action or
forbearance on the part of the promisee; (iii) the promisee reasonably relied on the promise and took
action to his detriment; and (iv) such promise is binding because injustice can be avoided only by
enforcement of the promise.’” (quoting SIGA Techs., Inc. v. PharmAthene, Inc., 67 A.3d 330, 347–
48 (Del. 2013))).
148
    Id. at 38-39.
149
    A325-27.

                                                 32
       Third, LCT argues that benefit-of-the-bargain damages are needed to vindicate

Delaware’s strong public policy against lying and fraud.150 Elsewhere, LCT makes a similar

argument that out-of-pocket damages do not sufficiently deter fraud because “[i]f a cheat can

anticipate that the worst that can happen is that he shall be called upon to pay back his profit

on the trade, he may be encouraged to defraud.”151 We reject both arguments for the same

reasons. Delaware has long recognized a public policy against deceit, 152 and deterrence may

be an important function of tort law. But those concerns do not justify awarding benefit-of-

the-bargain tort damages exceeding the scope of the plaintiff’s cognizable injuries.

       Delaware law does allow plaintiffs to seek punitive damages where, among other

things, the ordinary measure of damages is not sufficient to address the defendant’s culpable

conduct.153 But LCT did not seek punitive damages in its amended complaint,154 and LCT

does not appeal the Superior Court’s refusal to allow it to amend its fraud claim to add

punitive damages.155 Thus, LCT’s public policy and deterrence arguments do not justify

awarding benefit-of-the-bargain damages.

150
    Id. at 40-42.
151
    Opening Br. 20 (quoting C. McCormick, Handbook on the Law of Damages § 121 (1953)).
152
    See, e.g., Abry P’rs V, L.P. v. F&W Acq. LLC, 891 A.2d 1032, 1035 (Del. Ch. 2006) (“The public
policy against fraud is a strong and venerable one founded on the societal consensus that lying is
wrong.”).
153
    See, e.g., Stephenson, 462 A.2d at 1076-77 (“If the fraud is gross, oppressive, or aggravated, or
where it involves breach of trust or confidence, the plaintiff may recover punitive damages whether
he sues in tort or under the consumer fraud statute.”) (citations omitted).
154
    See A296-98.
155
    Compare A1300 (the Superior Court denying LCT’s request to amend its fraud claim to include
punitive damages) with Opening Br. (not appealing the Superior Court’s refusal to allow LCT to
amend its complaint and add a request for punitive damages).

                                                 33
       Fourth and finally, LCT argues that NGL waived any argument challenging benefit-

of-the-bargain damages by failing to object to the availability of such damages until after the

jury reached its verdict.156 Although perhaps a closer call, we think that NGL sufficiently

raised an objection to benefit-of-the-bargain damages by objecting to testimony related to

contract damages157 and by proposing a limiting instruction to the jury on damages.158 And

even if NGL did not properly object, we think that awarding benefit-of-the-bargain damages

on the facts of this case would be a plain error for the reasons provided above.

       B.      The Superior Court Abused Its Discretion by Ordering a New Trial on
               Fraud Damages

       NGL argues on cross-appeal that the Superior Court abused its discretion by ordering

a new trial on the damages for fraudulent misrepresentation because “the only compensable

loss that LCT identified was the value of the work it performed,” and “the $4 million

quantum meruit award fully compensates LCT for the value of its services. . . . Because

LCT cannot recover for the same loss twice, and no additional damages are recoverable, no

justification exists for another trial.”159 Assuming benefit-of-the-bargain damages are

unavailable, LCT concedes this point, noting that “[i]f given an out-of-pocket jury

156
    See Opening Br. 3; Reply Br. 21-22.
157
    See A493-94 (Counsel for NGL argued that “[Talarico] testified that he had an oral contract with
my client. And, obviously, I don’t need to tell the Court there’s no oral contract in this case. So
we’re concerned that language of that nature is potentially both prejudicial and very confusing to the
jury.”).
158
    See B2224 (“And we have three brief additional proposed instructions . . . . One is that the jury is
not ruling on a contract claim . . . .”).
159
    Answering Br. 52-53.

                                                  34
instruction, the jury would have realized that no damages could be awarded for fraud because

LCT put in no evidence of out-of-pocket damages.”160

       Given this concession, we hold that the Superior Court abused its discretion by

ordering a new trial on fraud damages. LCT presented a unitary theory of damages at trial

that focused exclusively on the value of the services that it provided related to the

TransMontaigne acquisition.161 Because benefit-of-the-bargain damages are unavailable,

LCT is limited to seeking out-of-pocket damages equal to the fair value of the services that

it provided without compensation. This measure of damages is identical to the compensation

that LCT is entitled to receive for its quantum meruit claim,162 and LCT cannot recover twice

for the same loss.163 Thus, LCT did not assert any independent damages to support the fraud

claim, and quantum meruit damages will fully compensate LCT for its loss. For this reason,

the Superior Court erred by submitting the fraud claim to the jury. LCT’s fraud claim failed

because it was not supported by damages independent from the quantum meruit claim.

Accordingly, we hold that the jury’s fraud verdict should be stricken and reverse the Superior

Court’s holding that a new trial is needed to determine LCT’s fraud damages.

160
    Reply Br. 35.
161
    See, e.g., A1295 (The Superior Court stated “the damages are the damages whether it’s quantum
meruit or its fraudulent misrepresentation. There’s been no evidence separating them. They’re the
same.”).
162
    See, e.g., O’Riley v. Rogers, 69 A.3d 1007, 1010 (Del. 2013).
163
    See, e.g., Duncan v. Theratx, Inc., 775 A.2d 1019, 1024 (Del. 2001).

                                               35
       Because we hold that LCT’s fraud claim should not have reached the jury, we need

not reach NGL’s separate arguments that the Superior Court erred by declining to dismiss

the fraud claim as a matter of law because LCT failed to prove reliance164 or that the Superior

Court erred by improperly instructing the jury on the elements of fraud.165

       C.     The Superior Court Did Not Abuse Its Discretion by Ordering a New
              Trial on Quantum Meruit Damages

       NGL argues on cross-appeal that “the [Superior Court] erred by striking the

jury’s quantum meruit verdict and ordering a new trial covering quantum meruit

damages” because the Superior Court waited too long to sua sponte order a new trial on

damages and abused its discretion by ordering a new trial on the basis of jury confusion.166

LCT raises its own objections, arguing that the Superior Court’s jury instruction improperly

excluded damages for the value created by the TransMontaigne transaction167 and that NGL

failed to properly raise this issue on appeal.168 We address each issue in turn.

164
    Answering Br. 54.
165
    Answering Br. 60. But see Wal-Mart Stores Inc. v. AIG Life Ins. Co., 901 A.2d 106, 115 (Del.
2006) (“Equitable fraud differs from common law fraud in one respect—the defendant need not
know that the representation is false.”) (citation omitted); Stephenson, 462 A.2d at 1074 (“At
common law, fraud (or deceit) consists of . . . the defendant’s knowledge or belief that the
representation was false, or was made with reckless indifference to the truth . . . .”).
166
    Answering Br. 49, 49-53.
167
    Reply Br. 34
168
    Id. at 32 n.11.

                                              36
              1.     The Superior Court did not sua sponte order a new trial on
                     quantum meruit damages based on potential jury confusion

       NGL argues that the Superior Court waited too long to sua sponte set aside the jury’s

quantum meruit verdict under Superior Court Civil Rule 59(c).169 Although Rule 59(c) gives

the Superior Court ten days to sua sponte set aside a verdict, here the Superior Court waited

sixteen months before setting aside the award, which NGL claims that neither party

challenged.170

       This argument fails to account for NGL’s own post-trial motion challenging the fraud

damages and the connection between the two damages awards. Among other things, NGL

argued in its post-trial motion that because

              LCT advanced a unitary damages theory at trial that presented
              no difference between the actual value of its services (quantum
              meruit) and its loss due to NGL’s alleged fraudulent
              misrepresentation . . . any recovery for fraudulent
              misrepresentation is limited to LCT’s actual pecuniary loss for
              the value of its service—which the jury found to have been $4
              million . . . .171

NGL also argued that “LCT’s damages presentation created a significant risk of jury

confusion, especially if there was a second damages blank.”172

169
    Id. at 52.
170
    See Answering Br. 52; LCT, 2019 WL 6896463, at *1.
171
    B2684-85 (emphasis removed).
172
    B2687.

                                               37
       Although NGL raised both arguments in the context of challenging the fraud

award,173 we think that NGL’s argument raised a problem common to both awards. Because

LCT presented a unitary theory of damages, the Superior Court’s dual-damages-line

approach was confusing. Accordingly, we hold that the Superior Court did not sua sponte

raise the issue of whether the dual damages lines confused the jury, casting doubt on the

quantum meruit award. NGL flagged the issue in its post-trial motion.

               2.      The Superior Court did not abuse its discretion because the dual
                       damages lines were confusing

       NGL next argues that there is no need for a new trial for two related reasons: (i) the

jury already found that the “fair value of the services that LCT provided NGL” was $4

million,174 and (ii) “testimony from NGL’s damages expert that a reasonable fee for the type

of services LCT provided is . . . $1-$4 million” adequately supported the jury’s verdict.175

       We review the Superior Court’s decision to order a new trial for abuse of discretion.176

When considering whether to order a new trial, the Superior Court “must give ‘enormous

deference’ to the jury’s verdict.”177 “A new trial is warranted only if the jury’s verdict is

‘clearly the result of passion, prejudice, partiality, corruption, [or confusion] . . . .’”178 “While

173
    See B2684-87.
174
    Id. at 50.
175
    Id.; see also B2395-96.
176
    See, e.g., O’Riley v. Rogers, 69 A.3d 1007, 1010 (Del. 2013).
177
    Cuonzo v. Shore, 958 A.2d 840, 844 (Del. 2008) (quoting Young v. Frase, 702 A.2d 1234, 1236
(Del.1997)).
178
    Reinco, Inc. v. Thompson, 906 A.2d 103, 110 (Del. 2006) (alteration in original) (footnotes
omitted) (quoting Lang v. Morant, 867 A.2d 182, 185 (Del. 2005)); see also Storey v. Camper, 401

                                                 38
we have at least acknowledged that a new trial is warranted if the jury’s verdict was clearly

the result of jury confusion, our case law is limited on the issue.”179 Nonetheless, “[o]ther

jurisdictions appear to require some evidence, beyond a ‘gut feeling,’ that the jury was in fact

confused to set aside a verdict supported by the evidence.”180

       Under Delaware law, quantum meruit “allows a party to recover the reasonable value

of his or her services . . . .”181 We agree with NGL that the quantum meruit damages line—

read in isolation—asked the jury the only question that mattered to determine LCT’s

damages. “What do you find to have been the fair value of the services that LCT provided

to NGL?”182 Nonetheless, we do not think that the Superior Court abused its discretion by

holding that providing the jury with two damages lines for a single theory of damages

confused the jury and muddied both the quantum meruit and fraud awards. Presented with

two different damages lines, the jury may have inferred that it was supposed to split a single

damages award between the quantum meruit and fraudulent misrepresentation claims.

       For example, NGL provided expert testimony that the standard investment banking

fee for the TransMontaigne acquisition would have been between $1 to $4 million.183 In

addition to contesting fraud liability, NGL’s closing argument relied heavily on its expert’s

A.2d 458, 465 (Del. 1979) (holding that the trial court should not set aside the jury’s verdict “unless
. . . a reasonable jury could not have reached the result.”).
179
      Reinco, 906 A.2d at 110 n.15.
180
      Id.
181
      Petrosky v. Peterson, 859 A.2d 77, 79 (Del. 2004).
182
      A1338.
183
      See, e.g., B2395-401; B1546-52.

                                                  39
testimony that LCT provided standard investment banking services worth a standard fee of

$1 to $4 million.184 The jury’s $4 million quantum meruit award fell within this range.

       On the other hand, the jury was presented with competing evidence suggesting that

LCT provided unusually valuable services related to the acquisition. Most notably, before

the fog of litigation NGL’s CEO Krimbill asked that NGL’s stockholders approve a

compensation arrangement with LCT that would “equate[] to a $29 million success fee.”

Acknowledging that this fee “appears high compared to a typical 1%-2% investment banker

success fee,” Krimbill explained,

               We are looking at the fee from the perspective of the value
               created to the NGL General Partner and the very attractive
               purchase price of $200 million. LCT was able to get [Morgan
               Stanley] to deal directly with NGL outside of an auction process
               which may have saved us tens of millions of dollars. Other
               potential buyers . . . were estimated to be offering $450 million,
               per the Wall Street Journal.

               ....

               . . . I feel this is a fair arrangement, although seemingly
               expensive, as we never would have had this opportunity at our
               price without LCT bringing it to us.185

       Krimbill also wrote that “[t]he value created for the NGL General Partner from this

transaction is approximately $500 million,”186 a large gain on a $200 million acquisition.

184
    See, e.g., B2562-63, at 65:22-66:5 (“[Y]ou’ll hear it some more from me in a bit – about
customary investment banking fees; it’s point five to two percent. On two hundred million, it gets
you to four million dollars. . . . LCT wants almost thirty percent of the transaction value. It makes
no sense. It has no perspective. Thirty percent.”).
185
    A236-37.
186
    A236.

                                                 40
By NGL’s own admission, the $29 million success fee that Krimbill proposed was more than

ten times larger than the standard investment banking fee.187 LCT’s closing argument relied

heavily on Krimbill’s October 2014 letter to establish the reasonable value of LCT’s

services.188

       With this evidence in mind, we do not think that the Superior Court abused its

discretion concluding that the dual damages lines confused the jury, requiring a new trial on

damages. The record supports the court’s conclusion that the jury could have found that LCT

provided services worth more than the standard investment banking fee but inferred that it

was supposed to spread that single award across the two different damages lines. Thus, the

quantum meruit damages award may have compensated LCT for the baseline value of its

investment banking services, and the fraudulent misrepresentation damages award may have

compensated LCT for the extraordinary services that it provided unique to the

TransMontaigne acquisition. If this occurred, it would be necessary to add both awards to

capture the full value that the jury placed on LCT’s uncompensated work.

187
    See, e.g., Answering Br. 50 (“Having been properly instructed on quantum meruit damages, the
jury determined that the value of LCT’s services was $4 million after considering seven days of trial
focused on this precise question, including testimony from NGL’s damages expert that a reasonable
fee for the type of services LCT provided is .5%-2% of the deal price, or $1-$4 million . . . .”).
188
    See, e.g., B2543-44, at 46:19-47:4 (“You may remember from Mr. Krimbill’s October 24th letter,
he adds twenty-nine. He doesn’t break it out in the letter, but what he obviously is referring to is the
value of the two percent interest and the value at the time of the three percent option, assuming an
exercise price at a seven hundred million dollar valuation, and a[n] overall valuation of the NGL
General Partner at one billion. So that’s twenty-nine.”).

                                                  41
       Further, the Superior Court provided the jury with minimal guidance regarding how

to measure fraud damages, instructing the jury that if LCT proved the elements of fraud,

“you should determine the damages that LCT suffered that are the direct result of the false

representations.”189 The lack of specific instructions regarding how to measure fraud

damages makes it all but impossible to determine, in retrospect, whether the $29 million

award was impermissible benefit-of-the-bargain damages, compensation for LCT’s

extraordinary services, or something else.

       We do not mean to express certainty that the jury was so confused. It is also possible

that the jury found that the fair value of LCT’s services was $4 million, and the $29 million

fraud award solely reflected impermissible benefit-of-the-bargain damages. Nonetheless,

given the deferential standard of review, and the risk of confusion unique to this case, we do

not think that the Superior Court abused its discretion by holding that providing the jury with

dual damages lines for a unitary theory of damages was confusing and irreparably muddied

the jury’s quantum meruit award. At this juncture, there is no satisfactory way to determine

whether the dual damages lines confused the jury.

       Accordingly, we affirm the Superior Court’s order requiring a new trial to determine

quantum meruit damages.

189
    A1323 (jury instructions sheet); see also B2624, at 127:17-20 (transcript of court’s oral jury
instructions) (same).

                                               42
                3.      LCT’s other arguments regarding the quantum meruit award fail

        LCT’s also raises two new issues related to the quantum meruit verdict. First, LCT

argues that “[t]he quantum meruit jury instruction improperly precluded the use of ‘value

created’ . . . to determine LCT’s compensation . . . .”190 We reject this argument on waiver

grounds. LCT waited to include this argument in its reply brief,191 but this is a legal issue

“which should have been included in a full and fair opening brief.”192 Further, LCT failed

to object to the quantum meruit damages instruction on this basis below.193 Therefore, we

hold that LCT has waived this issue on appeal.194

        Second, LCT suggests—in a footnote—that NGL’s request for interlocutory appeal

did not properly raise a challenge to the Superior Court’s decision to set aside the jury’s

quantum meruit award.195 We reject this argument. As we recognized in the Order accepting

this interlocutory appeal, “NGL sought certification of the Superior Court’s setting aside of

the $4 million quantum meruit verdict . . . .”196 Thus, NGL properly raised the issue.

190
    Reply Br. 34.
191
    Compare Opening Br. (not raising this issue) with Reply Br. (raising this issue).
192
    Supr. Ct. R. 14(c)(i); see also Roca v. E.I. du Pont de Nemours and Co., 842 A.2d 1238, 1242-
43 (Del. 2004) (holding that the appellant “abandoned and waived [an] issue in his appeal . . . by
raising it for the first time at oral argument”) (citation omitted); Cannon v. State, 947 A.2d 1120,
2008 WL 1960131, at *2 (Del. May 6, 2008) (Table) (“[W]e have held that the ‘failure of [an]
appellant to present and argue a legal issue in the text of an opening brief constitutes a waiver of that
claim on appeal.’” (quoting Roca, 842 A.2d at 1242-43)).
193
    See A1310-12.
194
    See Roca, 842 A.2d at 1243
195
    Id. at 32 n.11.
196
    Ex. C to Opening Br. 3.

                                                  43
IV.   CONCLUSION

      For the reasons provided above, the Superior Court’s December 5, 2019

Memorandum Opinion is AFFIRMED IN PART and REVERSED IN PART.

                                    44
         VAUGHN, Justice, dissenting in part:

         I agree with the Court’s decision that the plaintiff’s fraud claim fails because the

plaintiff was not able to offer any evidence of damages that were proximately caused by

fraud.

         The defendants have cross-appealed, contending the trial court committed error by

ordering a new trial on damages on the quantum meruit claim. I write this partial dissent

because I think the defendants are correct.

          The plaintiff began its closing argument at trial by discussing the quantum meruit

claim and the measure of the reasonable value of the plaintiff’s services. Early in the closing,

plaintiff’s counsel discussed Mr. Krimbill’s letter of October 24, 2014, which contained a

$29 million figure:

               Slide, please.

               Going back to Mr. Krimbill’s October 24th letter, in the sixth
               paragraph, Mr. Krimbill said:

               “This equates to a twenty-nine million dollar success fee, which
               appears to be high compared to a typical one-percent-to-two
               percent investment bankers success fee.”

               We will get to this in a minute.

               We are looking at the fee from the perspective of the value
               created in the NGL General Partner and the very attractive
               purchase price of two hundred million.197

197
      B2514.

                                              45
         As he continued to develop his argument for damages for the reasonable value of the

plaintiff’s services under the quantum meruit claim, plaintiff’s counsel also discussed $43.8

million, which is the amount Mr. Talarico thought he had been promised. He wound up his

quantum meruit argument by saying that the reasonable value of the plaintiff’s services was

one or the other of those two figures, to be decided by the jury in its discretion:

                So the crux of the dispute that you need to figure out is the range
                between twenty-nine million dollar valuation, which NGL has
                proposed, and the forty-three point eight million dollar valuation
                that LCT Capital believed and agreed to.

                This comes down to a credibility determination.

                Mr. Krimbill believes it’s twenty-nine million. That’s what he
                believed then. That’s what he said now.

                LCT Capital believes it’s forty-three point eight million.198

         Plaintiff’s counsel then discussed the fraud claim, rather briefly in comparison to the

discussion of the quantum meruit claim, without making any mention of separate damages

in connection with that claim.

         In the defense closing, counsel argued that the plaintiff’s numbers bore no relationship

to the value of the plaintiff’s services and, relying upon the testimony of a defense expert,

Mr. Keller, argued that the reasonable value of the plaintiff’s services was a range of $1.5

million to $4 million:

198
      B2544.

                                                46
                  We believe that the value of the services here falls within the fee
                  grid that is customarily and well-recognized in this industry.
                  That’s .5 percent to 2 percent.

                  It’s a $1.5 million to $4 million swing. That’s a lot of money.

                  Those are the parameters that apply.

                  There’s been zippo evidence that any work exceeded those
                  parameters.199

Defense counsel also argued generally that his clients had not committed fraud.

          In his instructions, the trial judge clearly explained to the jury that two, separate claims

were involved:

                  LCT’s claims against NGL, are for (1) quantum meruit for the
                  value of the services it alleges it provided to NGL in connection
                  with the TransMontaigne acquisition; and (2) fraudulent
                  misrepresentation based on an alleged false representation made
                  by Michael Krimbill, NGL’s CEO, relating to the fee for the
                  work performed by LCT.200

          The trial judge then went on to give separate instructions on quantum meruit and

fraud, including the damages recoverable under each claim.

          There is nothing wrong with the verdict sheet the jury was given. It gave the jury a

damages line to state its damages verdict on the quantum meruit claim and a separate line to

state its damages verdict on the fraud claim, if the jury found fraud. A quantum meruit claim

and a fraud claim are separate claims involving different facts and different legal injuries.

They are not duplicative. Where, as here, two claims are separate and not duplicative, I think

199
      B2602-03.
200
      A1319.

                                                  47
all parties are entitled to have the jury consider each claim separately and render a separate

damages verdict as to each. The parties need separately stated awards in order to be able to

assess whether they think each damage award is supported by the evidence, or whether a

post-trial motion is appropriate. I have never heard of trying two separate, nonduplicative

claims before a jury and asking the jury to return its verdict as a single damages figure for

both claims. The fact that a plaintiff decides for strategic or other reasons to present a so-

called unitary damages theory where two separate claims are asserted does not change these

principles.

        It is obvious to me from the jury’s verdict on the quantum meruit claim that it rejected

the plaintiff’s unitary damages approach and accepted the defense expert’s opinion that the

reasonable value of the plaintiff’s services was the $4 million at the upper end of the range

given by the defense expert.

        During his closing, plaintiff’s counsel argued that the reasonable value of LCT’s

services included value created in NGL by the transaction. Examples of this point are

footnoted below.201 The quantum meruit instruction, however, informed the jurors that they

201
    “We are looking at the fee from the perspective of the value created in the NGL General Partner and the
very attractive purchase price of two hundred million.” B2514. “I recognize working capital can be a difficult
subject to understand. We hope we provided you with some information at trial. The critical thing here is
that it provided an enormous value to NGL.” B2516. “NGL proposed a success fee at the time of twenty
nine million dollars.” B2527. “LCT also thought it had agreed on an appropriate success fee.” B2528. “Mr.
Krimbill has changed his story on three critical issues here. A standard fee, the options and the taxes. On the
first, on the standard fee, at the time he said the standard fee is inappropriate, it should be twenty nine million
success fee.” B2545.

                                                       48
were not to consider value created by the successful completion of the transaction. The

instruction stated:

                  The value of LCT’s services under quantum meruit is not
                  measured by any value created after NGL’s acquisition of
                  TransMontaigne. Instead, the standard for measuring the value
                  of LCT’s services under quantum meruit is the reasonable value
                  of the services at the time they were provided.202

          Given this instruction, it is not surprising to me that the jury would reject the plaintiff’s

argument that it should award the large “value created” or “success fee” that LCT sought,

and, instead, accept the testimony of the defense expert.

          The verdict sheet asked the jury whether the damages it found for quantum meruit

were the same as the damages it found for fraud. The jury answered no. That answer is

correct as there is no relationship between the $4 million figure it awarded for quantum

meruit and the $29 million figure it awarded for fraud.

          The jury was not confused. It knew what it was doing. Its quantum meruit damages

award complied with the trial judge’s instructions and is supported by the evidence. I would

reverse the Superior Court’s decision to order a new trial on damages on the quantum meruit

claim.

202
      A1320-21.

                                                   49