Court Opinion

ID: 9881391
Source: CourtListenerOpinion
Date Created: 2023-10-02 13:03:55.446554+00
Date Added: 2024-06-11T14:08:44.244448
License: Public Domain

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

GENER8, LLC and SYMBIENT             )
PRODUCT DEVELOPMENT, LLC,            )
                                     )
      Plaintiffs,                    )
                                     )
             v.                      )      C.A. No. 2022-0426-LWW
                                     )
SCOTT CASTANON,                      )
                                     )
      Defendant.                     )

                        MEMORANDUM OPINION

                      Date Submitted: June 16, 2023
                     Date Decided: September 29, 2023

Jonathan M. Stemerman & Luke W. Mette, ARMSTRONG TEASDALE, LLP,
Wilmington, Delaware; Donald W. Schroeder & Paul G. King, Jr., FOLEY &
LARDNER LLP, Boston, Massachusetts; Maureen M. Stewart, FOLEY &
LARDNER LLP, Tampa, Florida; Krista M. Cabrera & Mickle S. Jew, FOLEY &
LARDNER LLP, San Diego, California; Counsel for Plaintiffs Gener8, LLC and
Symbient Product Development, LLC

Kurt M. Heyman, Jamie L. Brown, Elizabeth A. DeFelice & Jenny Li, HEYMAN
ENERIO GATTUSO & HIRZEL LLP, Wilmington, Delaware; Counsel for
Defendant Scott Castanon

WILL, Vice Chancellor
         In February 2020, Scott Castanon sold Symbient Product Development,

LLC—the company he had founded—to Gener8, LLC for $14.4 million. As a

condition to the sale, Castanon agreed to restrictive covenants prohibiting him from

competing with Symbient and from soliciting its employees or customers for five

years.

         Castanon’s employment with Symbient ended on May 21, 2021.              He

immediately became involved in launching a company called Protoshop. Although

Protoshop was nominally started by Castanon’s stepson, Castanon was the

mastermind. Castanon secured office space, guaranteed equipment loans, and

provided the business’s startup capital.      He messaged Symbient customers to

advertise “his” new venture. He encouraged former Symbient employees to join

Protoshop. And he advised Protoshop’s team on projects for former Symbient

clients.

         Castanon does not seriously dispute these facts (other than a farce about

Protoshop’s funding being from a fictional rich uncle). To be sure, Castanon tried

to conceal his involvement—including by deleting electronic evidence. But he

acknowledges that he provided substantial assistance to Protoshop.

         Castanon’s central defense is that Protoshop is not Symbient’s competitor.

This was disproven at trial. Symbient designs and fabricates prototype molds to

create product prototypes. According to its website, Protoshop also performs

                                          1
prototype mold fabrication and offers design assistance services. It is no accident

that Protoshop’s website advertises with images taken directly from Symbient’s own

marketing materials. Protoshop is plainly targeting a slice of Symbient’s work.

      Ultimately, judgment is entered for the plaintiffs on their breach of contract

claims.     By forming a competing business and (at least indirectly) soliciting

Symbient customers and employees, Castanon violated his restrictive covenants and

harmed the plaintiffs. The plaintiffs also proved that Castanon spoliated evidence

and is in contempt of a court order barring him from working on Protoshop’s behalf.

Sanctions, including two adverse inferences, are issued as a result.

      The plaintiffs’ entitlement to a remedy for their harms, however, is limited.

Castanon does not draw a salary from or hold equity interests in Protoshop. No

damages from lost customer contracts were shown at trial. The plaintiffs proved

only that they have incurred costs to hire and train new employees after losing staff

to Protoshop. Money damages to address these out-of-pocket losses are awarded,

plus pre-judgment interest, attorneys’ fees, and injunctive relief to prevent future

breaches.

                                          2
I.        FACTUAL BACKGROUND

          Unless otherwise noted, the following facts were stipulated to by the parties

 or proven by a preponderance of the evidence at trial.1 Trial was held over three

 days during which seven fact and two expert witnesses testified live.2 The trial

 record includes 742 exhibits and 17 deposition transcripts.3

          A.      Symbient’s Business4

          Scott Castanon founded Symbient Product Development, LLC in or around

 2004.5 He served as Symbient’s Chief Executive Officer until the spring of 2021,

 and his employment ended on May 21, 2021.6 Symbient is a contract design

 engineering and manufacturing company “focused on development of medical/life

 science consumables” and prototyping.7 It is a California limited liability company

 with its principal place of business in Sunnyvale, California.8

 1
  Joint Pre-trial Stipulation and Order (Dkt. 119) (“PTO”). To the extent that conflicting
 evidence was presented, I have weighed it and made findings of fact accordingly.
 2
     Dkts. 135-38. Trial testimony is cited as “[Name] Tr.”
 3
   See Dkt. 135. Facts drawn from exhibits jointly submitted by the parties at trial are
 referred to according to the numbers provided on the parties’ joint exhibit list and cited as
 “JX__” unless otherwise defined. Deposition transcripts are cited as “[Name] Dep.”
 4
  After its acquisition, Symbient operates as part of Gener8, LLC. At times, I refer to
 Symbient and Gener8 interchangeably.
 5
     PTO ¶ II.B.22.
 6
     Id. ¶¶ II.A.4, II.B.39.
 7
     JX 17 at 4; see Castanon Tr. 238-39; Ceriani Tr. 465-67; Helm Tr. 82-83.
 8
     PTO ¶ II.A.2.

                                               3
         Symbient uses prototype molds to create product prototypes, offering

so-called “rapid prototyping.”9 Customers come to Symbient with initial product

designs ranging from napkin scrawls to three-dimensional computer-assisted design

(CAD) models.10 Symbient’s role is to efficiently design and build a prototype

version of the imagined products.11

         Symbient follows a five-phase development process to transform product

designs into prototype product molds and prototypes to be transitioned into

production and manufacturing.12 The five phases are:

                •      Phase 1: Defining product requirements; developing
                       concepts for potential design solutions; and analyzing and
                       presenting concepts to determine which concept best
                       meets product requirements.13

                •      Phase 2: Modeling the selected concept; fabricating and
                       testing a rapid prototype against product requirements; and
                       iterating the design.14

9
    JX 17 at 2; Helm Tr. 79-81; Castanon Tr. 242.
10
  Ceriani Tr. 531-32; see also id. at 465; Helm Tr. 75, 121; JX 129 (Symbient working
with a customer on the design of a product).
11
   Helm Tr. 79 (“It’s the process of quickly fabricating or manufacturing prototypes . . . .
And so you are using methods that, in the rapid prototyping phase, that are a little bit lower
fidelity, but get you a prototype quickly that gets you something testable.”); Castanon Tr.
242 (“[Speed is] the most important thing to [device design customers]. They’re coming
to us specifically because of our ability to get products to market faster than anyone else.”).
12
     JX 73 at 3-4; see also JX 17 at 6; Ceriani Tr. 465-67, 531-33; Helm Tr. 74-78, 121.
13
     JX 73 at 3-4; see also JX 17 at 6.
14
     JX 73 at 3-4; see also JX 17 at 6.

                                              4
                •      Phase 3: Fabricating prototype tooling; molding and
                       assembling functional devices; and iterating the mold and
                       assembly until product requirements are met. 15

                •      Phase 4: Performing design verification testing to confirm
                       that product requirements are met across a statistically
                       significant sample.16

                •      Phase 5: If requested by the customer, transferring the
                       prototype molds to a contract manufacturer to create
                       production molds, and supporting patent and regulatory
                       approval processes.17

         The transformation from an idea to a prototype design to a negative prototype

mold design to an injection molded prototype is not always linear; each phase can

affect others.18       Phases 2 and 3, for instance, overlap to include so-called

“moldability review.”19 After the product design is finalized, Symbient ensures that

it is “moldable.”20 Often, “moldability review” results in changes to the product

design.21

15
     JX 73 at 3-4; see also JX 17 at 6.
16
     JX 73 at 3-4; see also JX 17 at 6.
17
     JX 73 at 3-4; see also JX 17 at 6.
18
     See Helm Tr. 78, 140; Ceriani Tr. 472, 533.
19
     Helm Tr. 140; Ceriani Tr. 472.
20
     Ceriani Tr. 472; see also id. at 473, 533, 538-39; Helm Tr. 140.
21
     Ceriani Tr. 473-74.

                                               5
         The focus of Symbient’s business is on the full development cycle with a

particular emphasis on Phases 1 and 2—the most profitable phases.22                   Many

Symbient customers take an “off-ramp” after the early design stages rather than

complete the cycle.23 Such customers find another company to create prototype

molds and fabricate prototypes.24

         A relatively smaller group of customers come to Symbient by way of an

“on-ramp” later in the development cycle.25 If customers have a design prepared,

they might ask Symbient to create a prototype mold and use injection molding to

fabricate a prototype.26 Symbient avoids these “molding-only” or “standalone

prototype molding” jobs.27        They are lower margin and diminish Symbient’s

22
   See Helm Tr. 72; Jurkiewicz Tr. 694-95; Ceriani Tr. 458-59, 471 (“My understanding is
that the reason that we didn’t take on molding-only jobs . . . is that there was very little
profit, if any, and the big money was on the first two phases.”); Castanon Tr. 239
(“[Symbient] was first and foremost an engineering firm, and all the other services
supported that.”); see also JX 122 (estimating $1.3 million in annual revenue from
“prototype fabrication services”); JX 44 at 11 (estimating total revenue of $6.8 million in
2019).
23
  Helm Tr. 76; see also Ceriani Tr. 466; JX 129 at 1 (example of customer considering an
off-ramp).
24
  See, e.g., JX 129 at 1 (customer “hoping to send out a design sometime next week to get
some rapid prototype injection molding done” at another company).
25
     See Helm Tr. 121-22.
26
  See JX 23; JX 38 at 1; JX 13; JX 26; JX 214; JX 120; Helm Tr. 75. “Molding-only”
projects skip Phases 1 and 2 of Symbient’s development cycle. Ceriani Tr. 473.
27
   Helm Tr. 119; see also JX 38 at 1 (explaining that Symbient’s “general rule is to only
fabricate parts that [it] designed”); Castanon Tr. 240; Ceriani Tr. 470; JX 23 at 2; JX 13 at
3 (“As a general rule, [Symbient] only fabricate prototypes that we designed, as we are not
so much in the fabrication business . . . as we are in the product design/development
                                             6
prototype molding resources for customers needing the full development cycle.28

Symbient often outsources “molding-only” jobs to other companies.29 To facilitate

referrals, Symbient keeps a list of “molding partners” that (unlike Symbient) are not

design-focused.30

         Symbient’s consideration of a customer’s design intent gives it a competitive

advantage over molding-only companies.31 Symbient offers a fully integrated

process, helping customers create prototypes from little more than an idea.32

business.”); JX 214 at 1 (“[Symbient] [doesn’t] take molding jobs unless we have
developed the prototype. We are a development/engineering house with small
manufacturing capabilities for the customers we have developed a product for.”); JX 120;
JX 365.
28
  See Helm Tr. 119; Castanon Tr. 240; Ceriani Tr. 470-71; JX 88 at 1 (“[W]e [Symbient]
typically don’t take on projects that are tool [i.e., mold] fab and molding only. We don’t
make any money on the shop; it’s there to service our engineering projects.”).
29
  Helm Dep. 59, 62; JX 331 at 1(“[I]t is important to have one or two outside shops that
could support us when we get backed up. We work with several machine shops here in the
bay and we have a good working relationship with a couple of them . . . . [W]hile keeping
the mold design and prototyping in house[.]”); JX 139; JX 365. Symbient also outsourced
protype molding jobs when its projects became backlogged. See Helm Tr. 119, 144-45;
Castanon Tr. 240; Ceriani Tr. 567-68.
30
     JX 95; see Helm Dep. 67.
31
  JX 129 at 1 (“Since we usually design the parts, design the mold and mold the parts, we
understand the design intent so we design the mold accordingly.”); see Helm Tr. 152;
Castanon Tr. 243, 266-67; JX 17 at 7 (boasting “accountability in design” and “[i]f we
design it, we prove it with final molded assemblies”).
32
   See Ceriani Tr. 532 (“The primary function [of Symbient] was to change – to come up
with the design . . . . Symbient generates the CAD. Symbient does testing. Symbient
figures out how to get it working, and then Symbient provides the CAD of that part that is
then ready to go to fabricate a mold.”); Jurkiewicz Tr. 694-95 (“[Symbient is] an
engineering services company that does design services and prototyping services, and part
                                            7
Although Symbient avoids projects limited to Phase 3 prototype molding and

prototype fabrication, prototyping services remain central to Symbient’s business

and full development process.33 These prototype molding and fabrication services

are the “key[s] to the castle.”34 Without them, Symbient would be unable to rapidly

iterate prototype products to finetune a product design.35

          B.     Gener8’s Acquisition of Symbient

          In the summer of 2019, Gener8 and Symbient began collaborating on

customer projects.36 Gener8 is a California limited liability company headquartered

in Sunnyvale, California.37       G8 Holdings, LLC, a Delaware limited liability

company, owns all of Gener8’s membership interests.38 The ultimate majority

of those prototyping services are manufacturing prototype molds and manufacturing
prototype components.”).
33
   See JX 17 at 2; Castanon Tr. 239 (“Q. What were Symbient’s core competencies? A.
They were mostly engineering-focused. Such as helping the customer establish
requirements, creating concepts, modeling designs, creating prototypes, testing, iterating,
creating a prototype mold, design verification, assembly, process, design. And then
transfer to manufacturing as a final step.”); Jurkiewicz Tr. 665-66 (“Q. Is mold design core
to Symbient’s business? A. Yes. . . . Q. Is rapid prototype fabrication core to Symbient’s
business? A. Yes.”).
34
   Helm Tr. 129-30 (“There’s kind of a core part of the business, like food service, like
prototype molding. That’s kind of the key to the castle, in a sense, because if you don’t
offer that, then you’re not all that competitive.”).
35
     See Helm Tr. 130.
36
     PTO ¶ II.C.23.
37
     Id. ¶ II.A.1.
38
     Id. ¶ II.B.1.

                                             8
owner of G8 Holdings is Sverica Capital Management Partners IV, which is

managed by Sverica Capital Management LP (“Sverica”), a Delaware limited

partnership.39 On February 20, 2020, Gener8 acquired Symbient pursuant to an

Equity Purchase Agreement (the “EPA”).40 The EPA was executed by and among

Gener8, Symbient, SPD Newco, Inc., and (for limited purposes) the Castanon

Family Trust, Castanon, and Randi Castanon.41 In exchange for selling his Symbient

interests, Castanon received $9,150,000 in cash and 2,932,961 “rollover units” in G8

Holdings valued at $5,250,000.42

         C.      The EPA’s Terms

         Castanon agreed to several restrictive covenants in the EPA. The covenants

prevent Castanon from competing with Symbient’s business and from soliciting

Symbient and Gener8’s employees and customers.              Castanon agreed that the

restrictions “constitute[d] a material inducement to [Gener8] to enter into th[e]

[EPA] and consummate the transactions contemplated by th[e] [EPA].”43

39
     Id. ¶ II.B.2.
40
     Id. ¶ II.C.24; JX 63 (“EPA”); see JX 71 at 1.
41
  SPD Newco was an entity created and controlled by Castanon to effectuate the sale of
Symbient, and the Castanon Family Trust was the sole stockholder of SPD Newco. See JX
63. Randi Castanon is Scott Castanon’s spouse. PTO ¶ II.A.3. For clarity, I will refer to
Scott Castanon as “Castanon” and Randi Castanon by her full name.
42
   As a technical matter, SPD Newco received the consideration. PTO ¶ II.C.25; EPA
§ 2.1.
43
     EPA § 6.8(e).

                                               9
           Section 6.8(a) of the EPA is a non-compete provision. It prohibits Castanon

from “directly or indirectly . . . engag[ing] in or assist[ing] others in engaging in” a

“Restricted Business” in a defined “Territory” for a period of five years.44 It also

restricts him from having “an interest in any Person that engages directly or

indirectly in the Restricted Business in the Territory in any capacity,” including as

an “agent” or “consultant.”45 It further bars him from “intentionally interfer[ing] in

any material respect with the business relationships (whether formed prior to or after

the date of [the EPA]) between [Symbient] and customers or suppliers of

[Symbient].”46 “Restricted Business” is defined as “contract design engineering and

44
     Id. § 6.8(a). The full text of the provision is:
           For a period of five (5) years commencing on the Closing Date (the “Restricted
           Period”), neither of the Seller [SPD Newco], the Stockholder [the Castanon Family
           Trust] or Castanon shall, and none of them shall permit any of their Affiliates to,
           directly or indirectly, (i) engage in or assist others in engaging in the Restricted
           Business in the Territory; (ii) have an interest in any Person that engages directly or
           indirectly in the Restricted Business in the Territory in any capacity, including as a
           partner, shareholder, member, employee, principal, agent, trustee or consultant; or
           (iii) intentionally interfere in any material respect with the business relationships
           (whether formed prior to or after the date of this Agreement) between the Company
           and customers or suppliers of the Company.
The “Company” is defined as Symbient. Id. at Preamble.
45
     Id. § 6.8(a).
46
     Id.

                                                 10
manufacturing of medical and life science devices.”47 The “Territory” is “the United

States of America.”48

           The EPA contains non-solicit provisions that apply during a five-year

“Restricted Period.”49 Section 6.8(b) prohibits Castanon from “directly or indirectly,

“hir[ing] or solicit[ing] any employee of [Symbient] or encourag[ing] any such

employee who has left such employment,” with certain limitations.50 Section 6.8(c)

prohibits Castanon from “directly or indirectly, solicit[ing] or entic[ing], or

attempt[ing] to solicit or entice, any clients or customers of [Symbient] or potential

47
  Id. § 10.1(a). The EPA also provides: “For avoidance of doubt, ‘Restricted Business’
shall not include any business which provides contract design engineering and
manufacturing services solely with respect to products other than medical and life science
devices.” Id.
48
     Id.
 “Restricted Period” is defined as the “period of five (5) years commencing on the Closing
49

Date.” Id. § 6.8 (a).
50
     Id. § 6.8(b). The full text of the provision is:
           During the Restricted Period, neither of Seller [SPD Newco], Stockholder [the
           Castanon Family Trust] or Castanon shall, and none of them shall permit any of
           their Affiliates to, directly or indirectly, hire or solicit any employee of the Company
           or encourage any such employee to leave such employment or hire any such
           employee who has left such employment, except pursuant to a general solicitation
           which is not directed specifically to any such employees; provided, that nothing in
           this Section 6.8 shall prevent Seller, Stockholder, Castanon or any of their Affiliates
           from hiring (i) any employee whose employment has been terminated by the
           Company or Purchaser or (ii) after one hundred eighty (180) days from the date of
           termination of employment, any employee whose employment has been terminated
           by the employee.
                                                 11
clients or customers of [Symbient] for purposes of diverting their business or

services from [Symbient].”51

          Section 9.2 of the EPA states that Castanon will be personally liable for a

breach of the restrictive covenants in the EPA or “any ancillary agreement.”52

          D.         The Operating Agreement

          Under Section 7.1(i) of the EPA, Castanon, through SPD Newco, was also

required to enter into an operating agreement with Gener8’s parent company, G8

Holdings.53          Because Castanon received units in G8 Holdings, he signed the

Amended and Restated Operating Agreement of G8 Holdings LLC (the “Operating

51
     Id. § 6.8(c). The full text of the provision is:
          During the Restricted Period, neither of Seller [SPD Newco], Stockholder [the
          Castanon Family Trust] or Castanon shall, and none of them shall permit any of
          their Affiliates to, directly or indirectly, solicit or entice, or attempt to solicit or
          entice, any clients or customers of the Company or potential clients or customers of
          the Company for purposes of diverting their business or services from the Company.
52
     Id. § 9.2. The relevant provision provides that:
          [T]he Seller [SPD Newco], the Stockholder [the Castanon Family Trust], and the
          Trust Grantors [Castanon and Randi Castanon] shall jointly and severally indemnify
          [Gener8] and its Affiliates and . . . hold them harmless from and against any and all
          Losses incurred or suffered . . . resulting from, arising out of or related to any . . .
          breach of any covenant or agreement of [Symbient] or [SPD Newco], [the Castanon
          Family Trust] or Castanon contained in th[e] [EPA] or any ancillary agreement to
          which the Company or the Seller, Stockholder or Castanon are a party that are
          required to be performed by any of them . . . .
53
     Id. § 7.1(i).

                                                 12
Agreement”) as a “Member.”54 In that capacity, Castanon was subject to an

additional non-compete covenant prohibiting him from “engag[ing] in or

possess[ing] interests in any such business that may be deemed to be in competition

with any Portfolio Company.”55 The “Portfolio Compan[ies]” are G8 Holdings’

“operating subsidiaries,” including Symbient and Gener8.56

           The Operating Agreement gave Castanon the right to observe meetings of G8

Holdings’ board of the managers (the “Board”) and receive certain Board

materials.57 Castanon was obligated to “hold in confidence and trust and to act in a

fiduciary manner with respect to all information” given to him as a Board observer.58

           E.    Castanon’s Termination

           After the transaction closed, Gener8 and Symbient worked to add

manufacturing capabilities to Symbient’s business.59 Doing so was part of Gener8’s

investment thesis for Symbient.60          In November 2020, Symbient drafted a

54
  As a technical matter, SPD Newco received the G8 Holdings units, became a “Member,”
and executed the Operating Agreement. Id. (requiring SPD Newco to execute the
Operating Agreement); JX 61 (“Operating Agreement”); see JX 71 at 1.
55
     Operating Agreement § 4.2.
56
     Id. § 1.4; see PTO ¶ II.B.1.
57
     Operating Agreement § 3.12(b).
58
     Id.
59
     See Helm Tr. 73; Castanon Tr. 244; Jurkiewicz Tr. 695; JX 90; JX 186.
60
     JX 44 at 16-17.

                                            13
Manufacturing Transition Quality Plan, which contemplated “turnkey design,

development, manufacturing and servicing solutions for final devices.”61

         For a time post-closing, Castanon remained at the helm of Symbient and

managed its day-to-day operations.62 But in March 2021, Jerry Jurkiewicz joined

Gener8 as CEO; Castanon was President.63                On April 21, 2021, Jurkiewicz

terminated Castanon as President due to his distaste for Castanon’s management

style.64 Jurkiewicz hoped to find Castanon a different role within Symbient.65

         Castanon took the news poorly and refused to discuss other job positions.66

His employment at Symbient formally ended on May 21, 2021.67 Castanon was

terminated without cause under a provision in his employment agreement.68

61
     JX 126 at 4.
62
     PTO ¶ II.C.38; JX 64 (describing Castanon’s role as “President” of Symbient).
63
     Finley Tr. 36.
64
  Jurkiewicz Tr. 675-76 (“Q. And why did you remove him [Castanon] from that role? A.
Culture. He abused employees. And it was a pervasive sentiment in my one-on-ones. It
was described as a culture of fear in my first visit by two separate people.”); see also id. at
677; Finley Tr. 34-36; Ceriani Tr. 463 (testifying that Castanon “could be difficult as a
manger” and that he would easily “get mad” at and “be impatient” with employees).
65
     Jurkiewicz Tr. 675.
66
     Id. at 677-79; Castanon Tr. 256-58.
67
     PTO ¶ II.C.39.
68
   JX 64 § 6(a). Castanon suspects that Sverica and Gener8 wanted to oust him from
Symbient—even before the acquisition closed. Sverica and Gener8 had discussed and
planned for the possibility that Castanon would not be part of Symbient in the future. See
JX 58; JX 59; JXs 86-87. But there is no evidence (other than Castanon’s testimony about
                                              14
         F.     The Unit Repurchase

         After leaving Symbient, Castanon sought to liquidate his membership interest

in G8 Holdings.69 He told Jurkiewicz that he “want[ed] his money out” because

Gener8 was “going down the tubes.”70 Castanon and G8 Holdings negotiated a

repurchase of Castanon’s units over the ensuing months.

         By May 18, 2021, Castanon sought to exercise his Board observer rights.71

He had not received Board materials for (or even notice of) a scheduled May 27

meeting.72 After Castanon reached out, the G8 Holdings Board discussed how to

“shield[] stuff from him.”73 G8 Holdings wanted to “excise anything that shows

growth” and any other information that Castanon “w[ould] use to justify an above-

his beliefs) that there was a premeditated plan to oust him. Finley and Jurkiewicz credibly
testified otherwise. Finley Tr. 34-36; Jurkiewicz Tr. 674-75.
 Castanon Tr. 402-04; Jurkiewicz Tr. 677; see JX 161 at 2 (“[Scott] said he wanted his
69

money out.”).
70
     JX 166 at 1; Jurkiewicz Tr. 677; see Castanon Tr. 403-04.
71
     JX 192 at 4.
72
     JX 201; see also JX 192.
73
     JX 192 at 1.

                                             15
cost share price.”74 The Board meeting agenda was “revise[d]” to “account for

[Castanon’s] attendance.”75 Castanon chose not to attend this Board meeting.76

         On June 24, Castanon made an offer to sell his G8 Holdings units for

$9,440,000.77 G8 Holdings counteroffered at $5,250,000.78

         On August 11, Castanon again sought to exercise his Board observer rights.79

He had received neither materials for nor notice of an August 20 meeting.80 The

Board “sanitize[d]” the materials given to Castanon and planned to meet without

him to discuss “sensitive topics.”81 G8 Holdings was especially concerned with

discussing the company’s planned M&A activity in Castanon’s presence.82

74
     JX 196 at 1.
75
  See JX 199 at 1 (“I don’t want to play this game more than once where we are modifying
the Board agenda, but I do not think we can speak about the company’s standing and
prospects openly with Scott on the call.”); see also JX 198; JX 200; JX 201 (“Please revise
the agenda to account for Scott’s attendance this Thursday and distribute.”); JX 203.
76
     Hylant Tr. 732.
77
     JX 216 at 1.
78
     JX 234 at 2-3.
79
     JX 239 at 1.
80
     See id.; JX 255.
81
     JX 257; JX 253.
82
   JX 250 (“We should probably reserve M&A for the exec session since we’re talking
valuation.”); JX 251; JX 254; compare JX 255 (version of the board meeting slide deck
circulated to Castanon), with JX 238 (an earlier draft).
                                            16
         Castanon attended the August Board meeting.83 The Board discussed a bleary

financial outlook for the company, including a downgraded EBITDA forecast.84

Afterward, one Board member told another that “if [Castanon] was resistant to a deal

before, [the information presented] just might push him to sell.”85

         Three days after the Board meeting, on August 23, Castanon accepted the

$5,250,000 counteroffer.86 One Board member remarked: “I guess the last meeting

did the trick.”87 About a week later, on September 3, Gener8 executed a letter of

intent to acquire a medical device software development company.88 G8 Holdings

sought to “clear [Castanon] out ASAP before he change[d] his mind.”89

         On October 8, Castanon and G8 Holdings entered into a Unit Repurchase

Agreement, through which G8 Holdings repurchased Castanon’s G8 Holdings units

for $5,250,000.90 Castanon ceased to hold any equity interests in G8 Holdings or

83
     See JX 258.
84
     See e.g., JX 261; JX 577 at 18.
85
     JX 259.
86
     JX 264.
87
     JX 265.
88
     JX 275.
89
  Id. at 1; JX 276 (“When can we buy-back Scott’s shares?”; “Immediately.”); JXs 277-
79.
90
     PTO ¶ II.C.61; JX 304.

                                         17
Gener8.91 Thus, he was no longer bound by the Operating Agreement, which lacks

a survival clause. As to the EPA, Castanon “acknowledge[d], confirm[ed] and

agree[d] to abide by the obligations contained in the [EPA], including, without

limitation, those [restrictive covenants] set forth in Section 6.8.”92

           G.      Protoshop’s Formation

           In July 2021—two months after Castanon’s departure from Symbient—a

company called Protoshop, Inc. was formed. Castanon’s stepson James “Jimmy”

Isaacs purports to be Protoshop’s founder.93 Isaacs was employed by Symbient from

October 2006 to October 2021 as a machinist.94 When Isaacs left Symbient in

October 2021, he held the position of machine shop supervisor.95

           In June or July 2021, Isaacs asked Castanon for “help” with Protoshop.96

Castanon agreed.97 Castanon “provided substantial startup help.”98

91
     PTO ¶ II.C.62.
92
     JX 304 at 4.
93
  Isaacs Tr. 170-71. Isaacs did not testify live at trial. His deposition testimony was played
during trial as contemplated by the pre-trial order. See PTO ¶ V.D.
94
     PTO ¶ II.B.5.
95
     Id.
96
     Isaacs Tr. 171-72; see Castanon Tr. 268.
97
     Castanon Tr. 268.
98
     Id. at 351.

                                                18
         At the same time, Isaacs approached Symbient’s Principal Engineer about

joining Protoshop and offered him a 25% stake in the business.99 He declined.

Isaacs next approached Dylann Ceriani, Symbient’s Director of Engineering, with

the same offer.100 Ceriani accepted, wanting to fulfill her longstanding desire to start

a business.101 Isaacs and Ceriani planned to own Protoshop 75%/25%.102 Ceriani

did not contribute any capital in exchange for her 25% stake.103 Nor did Isaacs for

his 75% stake.104

         H.     Financing from Isaacs’ “Rich Uncle”

         Around June or July 2021, Protoshop received a $400,000 interest-free loan

for startup financing. Isaacs told Ceriani and others that the funds were from his

“rich uncle.”105 Ceriani was led to believe that an uncle named “Bob” was the

funding source.106 She even backed up Isaacs story when he told Symbient upon

99
     Isaacs Tr. 183-85; see also PTO ¶ II.B.12.
100
      Ceriani Tr. 483; Isaacs Tr. 185-86; see also PTO ¶ II.B.6.
101
      Ceriani Tr. 483, 491- 92; see Isaacs Tr. 185-86.
102
      Isaacs Tr. 199.
103
      Ceriani Tr. 486.
104
      Isaacs Tr. 199; see Ceriani Tr. 486-87.
105
   Ceriani Tr. 486-87, 558; see Helm Tr. 109; Isaacs Tr. 178-82. To the extent Isaacs
averred that he received less than $200,000 from his “rich uncle,” his testimony is neither
credible nor supported by the broader record. Cf. Isaacs Tr. 180-81.
106
   Ceriani Tr. 486-87, 560; id. at 558 (trying to recall if the uncle’s name was “Bob”);
Ceriani Dep. 61 (“Bob is what comes to mind, but I don’t know if that’s right.”).
                                                19
resigning that Castanon was not involved in Protoshop and that a “rich uncle” was

financing the business.107 Unbeknownst to Ceriani, Isaacs’ story was a lie.108

         During his deposition, Isaacs refused to identify the uncle, citing “financial

privacy rights.”109 He would only say that the lender was his father’s brother and

that his “rich uncle’s” spouse had worked for an affiliate of Verisign Inc.110 This

testimony was easily disproven. The plaintiffs deposed Isaacs’ uncle (Robert

Isaacs), who confirmed that his spouse once worked for a Verisign affiliate.111 But

Robert Isaacs confirmed that he did not loan or gift money to Isaacs.112 Isaacs’ only

other uncle (James Isaacs) worked in the nuclear engineering field; neither he nor

his spouse were ever affiliated with Verisign.113

         Who, then, could the mysterious “rich uncle” bankrolling Protoshop be? The

overwhelming weight of the evidence suggests that it was Castanon. Castanon has

107
      Ceriani Dep. 61-69; Ceriani Tr. 485-86; see Isaacs Dep. 55, 85; JX 297; JX 542.
108
   Ceriani did not know Isaacs was lying to her about the source of the financing. See
Ceriani Tr. 560. Ceriani was the most credible witness at trial and seemed appropriately
concerned about Isaacs’ apparent mistruths.
109
      Isaacs Tr. 179-80.
110
      Id. at 180-81.
111
   Robert Isaacs Tr. 225 (testifying that Isaacs never asked him for money). For clarity, I
refer to Jimmy Isaacs as “Isaacs” and to Robert Isaacs by his full name. Robert Isaacs did
not testify live at trial. His deposition testimony was played during trial pursuant to the
pre-trial order. See PTO ¶ V.D.
112
      Robert Isaacs Tr. 224-25.
113
      Id. at 229.

                                             20
a close personal relationship with Isaacs and an expansive knowledge of the plastic

injection molding industry. He made over $9 million in cash from selling Symbient

just before Protoshop received startup funds in June 2021.114 After losing his senior

position at the company he founded, he had a motive to cause it harm. He also had

a motive to hide his involvement, given the restrictive covenants in the EPA.

         I.     Protoshop’s Launch

         Castanon’s assistance to Protoshop was not only financial. He also agreed to

help with “[a]nything that [Isaacs] needed.”115 He (in his own words) “work[ed]

around the clock for months” to “get Protoshop started.”116

         In July 2021, Castanon filed California corporate formation documents for

Protoshop.117 A Statement of Information filed with the Secretary of State of

California on July 15 identifies Isaacs as Protoshop’s Chief Executive Officer and

Director, and Ceriani as its Chief Financial Officer and Director.118 Protoshop’s

114
   Castanon denied being the “rich uncle.” See Castanon Tr. 408-09, 416-17. He was not
credible—in no small part since he was caught in other lies at trial. See infra Section II.A.
Castanon admitted to later providing financing in April and May 2022. See infra
Section I.L. This timing distinction seems self-serving since it could affect Castanon’s
potential liability under the EPA if he improperly solicited Isaac and Ceriani to leave
Symbient.
115
      Castanon Tr. 268.
116
      JX 686 at 171.
117
      PTO ¶¶ II.C.40-41; JX 224.
118
      PTO ¶ II.C.42; JX 224.

                                             21
Articles of Incorporation and Statement of Information identify Castanon as its

“Agent” for service of process.119

          In August 2021, Castanon scouted out and secured office space for

Protoshop—less than a mile away from Symbient’s office in Carlsbad, California.120

He signed and personally guaranteed the lease for Protoshop’s office.121 He made

Protoshop’s initial lease payment of $28,075.122

          Castanon’s “substantial startup help”123 did not end there.        He set up

Protoshop’s logo,124 website,125 email domain and email accounts,126 computer

systems,127 mold design software,128 office electricity,129 and health insurance

119
      PTO ¶ II.C.42.
120
      See PTO ¶¶ II.C.51-52; Helm Tr. 82, 88; JX 17 at 1; JX 242.
121
      PTO ¶ II.C.52.
122
      PTO ¶ II.C.53; JX 242.
123
    Castanon Tr. 351; see also id. at 400 (“I’ve said many, many times, I helped them get
started.”).
124
      PTO ¶ II.C.44.
125
   Id. ¶ II.C.48; Ceriani Tr. 506 (testifying that Castanon did most of the work on the
website).
126
      PTO ¶ II.C.46.
127
      Id. ¶ II.C.54; JX 433; JX 475.
128
      PTO ¶ II.C.47.
129
      Id. ¶ II.C.49.

                                             22
plans.130 He also ordered business equipment for Protoshop using his personal

funds, totaling over $160,000 dollars.131

          Protoshop officially opened on November 1, 2021.132 It had five employees:

Isaacs, Ceriani, Jennifer Taylor (Symbient’s former Office Manager from September

2015 to October 2021), Randi Castanon, and Scout Ceriani (Ceriani’s daughter).133

Isaacs, Ceriani, and Taylor had resigned from their positions at Symbient just a few

weeks earlier.134 Ceriani, in particular, was viewed as a major loss to Symbient. She

was named a “Key Employee” in the EPA and considered a “unicorn” engineer given

her talent, diverse skill set, and customer skills.135

          Symbient and Gener8 became suspicious. On October 7, their attorney

reached out to Castanon’s counsel, questioning whether Castanon was complying

with his non-compete and non-solicit obligations.136 Two days later, on October 9,

Castanon texted Ceriani: “They [plaintiffs] might sue me as they get frustrated with

130
      Id. ¶ II.C.55.
131
   Id. ¶ II.C.50; see JX 248; JX 271; JX 340; JXs 398-400, JX 407; JX 418; JXs 426-28;
JX 433; JX 445; JX 466; JX 475; JX 705 at 191, 202, 248, 331; JX 707 at 30-31; JX 733;
Castanon Tr. 364-65, 380.
132
      Isaacs Tr. 189; Ceriani Tr. 499.
133
      PTO ¶¶ II.B.7, 17; Ceriani Tr. 499; Castanon Tr. 348-49.
134
      PTO ¶¶ II.C.58-59, 65.
135
      EPA § 10.1(a); Helm Tr. 106; Ceriani Tr. 548; Jurkiewicz Tr. 703; cf. Castanon Tr. 434-
35.
136
      PTO ¶ II.C.60.

                                              23
employees leaving but I don’t think they would win.”137 On October 14, Castanon’s

counsel denied Castanon’s involvement and wrote that he was “not providing

financing to the new company.”138

         J.     Protoshop’s Business

         Protoshop aims to provide rapid, high quality prototype molding services to

clients in the life science and medical industries.139 Protoshop’s work is focused on

a subset of the Symbient development cycle phases—principally, Phase 3.140 As

Ceriani put it, “Protoshop’s business model is to fabricate molds and to mold parts,

and that’s it.”141

         As a first step in its workflow, Protoshop offers optional “[part] design

assistance.”142 This process is similar to Phases 1 and 2 of Symbient’s development

cycle.143 But unlike Symbient, which creates products of assembled parts, Protoshop

focuses on designing (and molding) unassembled parts.144

137
      JX 309 at 2.
138
      PTO ¶ II.C.64.
139
      JX 547; JX 642; JX 645; JX 530 at 9 (showing Protoshop’s development process).
140
      Helm Tr. 88, 121-22, 146; Ceriani Tr. 467-68, 471, 535-36; Isaacs Tr. 176.
141
    Ceriani Tr. 502; see also Castanon Tr. 264-65, 267, 411; Isaacs Tr. 176; but see Helm
Tr. 113 (noting that Protoshop also designs and manufactures molds).
142
      JX 530 at 9.
143
      See Helm Tr. 152-53.
144
      Ceriani Tr. 502; Castanon Tr. 264; Isaacs Tr. 176.

                                              24
         Some Protoshop customers skip the design assistance step and come to

Protoshop with a prepared CAD model of the part.145 In that case, Protoshop

conducts a “moldability review” to confirm that the part can be molded.146 The

moldability review often results in changes to the mold design and, thus, the part

design.147 Protoshop views the moldability review as giving it an edge on “molding-

only” firms.148 It can make modifications faster and cheaper than most companies

that solely mold parts.149

         K.     Protoshop’s Customers

         Protoshop had its first customer by mid-November 2021.150 To secure more,

Castanon promoted Protoshop on social media. In December, Castanon asked his

LinkedIn contacts—including former, current, and potential customers of

Symbient—to “follow Protoshop” on LinkedIn and visit Protoshop’s website.151 He

145
      See Isaacs Tr. 176-77; Ceriani Tr. 496-97, 502-04, 535-36, 538.
146
   Ceriani Tr. 472-74, 538-41; Castanon Tr. 264-65 (describing the “moldability report”);
JX 530 at 5 (“Part moldability review to confirm parts are molding-ready.”); JX 347.
147
      Ceriani Tr. 473-74.
148
      Id. at. 502-04; JX 347.
149
      Ceriani Tr. 502-04; JX 347.
150
      Ceriani Tr. 500; Castanon Tr. 415-16.
151
   JX 686 at 122-85; see Helm Tr. 99-101 (confirming these contacts included former,
current, and potential customers of Symbient).
                                              25
explained that Protoshop was started by “former Symbient workers” he was

“mentoring.”152

            Castanon boasted to contacts that “[Protoshop’s] prototype molds are

fabricated quickly within a few days and part quality is far better than any service

out there,” encouraging his contacts to “refer anyone you know that might have a

need for prototype molding.”153 In one direct message, he wrote: “I sold my mold

making method along with Symbient but I came up with something better for

Protoshop.”154 In another, he said “I sold the molding method along with the

company so I had to create something new. I came up with a method . . . even better

than before.”155

            In March 2022, Castanon sent out another blast message to his LinkedIn

contacts: “I just launched a new take on mold fabrication (ProtoShopInc) that means

prototype molds getting fabricated in 3‐5 days and mold iterations within 1‐2

days.”156 Castanon urged his contacts to reach out so that he could “give [them] a

glimpse at how we are solving some of the biggest headaches I dealt with all those

152
      JX 686 at 122-85.
153
      Id.
154
      Id. at 130.
155
      Id. at 170.
156
      Id. at 2, 4-6, 9-121, 188.

                                          26
years on the client side of the table.”157 One request for a referral said: “After I sold

[Symbient], I started Protoshop.”158

            The comparisons to Symbient in advertising Protoshop did not end there.

Protoshop’s marketing materials and website featured images of parts and products

that Symbient had designed for its own customers.159

            In time, Protoshop began to service a number of Symbient’s former, current,

and prospective clients. Common customers include ProteoWise Inc., Coagulo

Medical Technologies, Inc., and DeviceLab Inc.160

            L.      Castanon’s Additional Financial Support of Protoshop

            In February 2022, Castanon personally guaranteed and signed approximately

$150,000 of equipment loans for two milling machines for Protoshop.161 In securing

the loan, Castanon told the lender: “I’ve taken over the shares in Protoshop for 75%

of the company that were owned by James Isaacs. It’s been officially changed with

the state. I was acting as advisor to the company but I’ve stepped in as president.”162

157
      Id.
158
      Id. at 117.
159
   Compare JX 17 (images of a microfluidic diagnostics cartridge and DNA cartridges on
Symbient’s marketing materials), with JX 530 at 11 (same images of microfluidic
diagnostics and DNA cartridges on Protoshop’s business overview slide presentation); see
also Helm Tr. 94-98.
160
      See infra Section II.B.3.
161
      PTO ¶ II.C.72.
162
      JX 437.

                                             27
Castanon had, in fact, filed a new Statement of Information with the State of

California identifying himself as Protoshop’s Chief Executive Officer and

Director.163 But Isaacs never transferred his 75% ownership to Castanon.164

         Castanon’s financial support of Protoshop continued throughout the spring.

In March 2022, Castanon personally guaranteed another $90,000 equipment loan for

a molding machine.165          On April 14 and May 4, 2022, Castanon made two

interest-free loans ($50,000 and $100,000) to Protoshop.166 Castanon testified that

he made the loans to Isaacs.167 But Ceriani confirmed that the funds were deposited

in Protoshop’s accounts.168

         M.     Gener8’s Cease-and-Desist Letter

         In March 2022, two other Symbient employees—Marcio Lupercio and

Deserie Ancheta—joined Protoshop.169 Lupercio had been with Symbient since

163
      PTO ¶¶ II.C.70-71; JX 430.
164
      See Isaacs Tr. 202-03; Castanon Tr. 271-73.
165
      PTO ¶ II.C.73; JX 468.
166
      PTO ¶ II.C.74; Castanon Tr. 274-76.
167
      Castanon Tr. 337-38.
168
      Ceriani Tr. 555.
169
      PTO ¶¶ II.B.8-9.

                                             28
March 2018, and Ancheta since August 2021.170 At the time of their departures,

Lupercio was Molding Supervisor and Ancheta was a machinist.171

            On April 21, 2022, Gener8’s attorney sent Castanon’s counsel a

cease-and-desist letter.172     The letter stated that Castanon’s involvement with

Protoshop and solicitation of Gener8 employees and customers violated the

restrictive covenants in the EPA.173 The letter told Castanon that Gener8 was

contemplating litigation and to “preserve all property” in his possession, including

electronic information, about his “affiliation with Protoshop, its formation, and its

business.”174

            N.    This Litigation

            On May 16, 2022, Symbient and Gener8 filed a Verified Complaint in this

court, along with a motion for expedited proceedings and a motion for a temporary

restraining order.175 The parties agreed to resolve the motions through a stipulated

170
      Id.
171
      Id.
172
      Id. ¶ II.C.75; JX 514.
173
      JX 514.
174
      Id. at 8.
175
   Dkts. 1-3. On October 3, 2022, the plaintiffs filed a similar action against Protoshop in
California Superior Court. See Gener8, LLC v. Protoshop Inc., Case No. 37-2022-
00039503-CU-PT-CTL (Cal. Super. Ct.).
                                            29
Consent Order, which I entered on May 27.176 Broadly speaking, the Consent Order

prohibited Castanon from assisting Protoshop while this action was pending. 177 On

October 20, the plaintiffs agreed to lift the Consent Order when they requested a

continuance of the trial.178

          On October 10, the plaintiffs filed a Verified Amended Complaint (the

“Complaint”).179 The Complaint advances five claims against Castanon. Count I is

a claim for breach of the restrictive covenants in the EPA.180 Count II is a claim for

breach of the implied covenant of good faith and fair dealing.181 Counts III and IV

are claims for intentional interference with contractual relations and with prospective

economic advantage, respectively.182 And Count V is a claim for breach of fiduciary

duty as a former Gener8 employee and G8 Holdings Board observer.183

          A three-day trial was held from January 30 to February 1, 2023.184 After trial,

the plaintiffs moved for sanctions based on spoliation and violations of the Consent

176
      Consent Order (Dkt. 14).
177
      Id. ¶ 2.
178
      Dkt. 77.
179
      Verified Am. Compl. (Dkt. 69) (“Compl.”); see Dkt. 63 (granting leave to amend).
180
      Compl. ¶¶ 123-40.
181
      Id. ¶¶ 141-45.
182
      Id. ¶¶ 146-69.
183
      Id. ¶¶ 170-76.
184
      Dkts. 135-38.

                                             30
Order.185 After post-trial briefing and argument, this matter was submitted for

decision as of June 16.186

II.      LEGAL ANALYSIS

         I begin my analysis by resolving the plaintiffs’ motion for sanctions. I

conclude that Castanon is in contempt of the Consent Order and recklessly spoliated

evidence. As remedies, I draw certain adverse inferences and award the plaintiffs

their reasonable fees and costs in connection with the sanctions motion.

         I go on to evaluate the merits of the plaintiffs’ claims. The plaintiffs proved

that Castanon breached the non-compete and non-solicit provisions of the EPA

(Count I). They failed to prove their other claims (Counts II through V). The

plaintiffs are entitled to $104,356.00 in damages plus pre-judgment interest,

injunctive relief requiring Castanon to abide by his restrictive covenants, and their

reasonable attorneys’ fees and costs.

         A.     Sanctions

         The plaintiffs moved for sanctions against Castanon under Court of Chancery

Rules 37(e) and 70(b).187 They argue that sanctions are appropriate to remedy

Castanon’s violation of the Consent Order and spoliation of evidence. Because

185
      Pls.’ Mot. for Sanctions (Dkt. 145) (“Sanctions Mot.”); see also Dkts. 150, 153.
186
   Dkts. 162, 164. Post-trial briefing included a sur-reply that I permitted Castanon to file.
See Dkts. 159, 160.
187
      Sanctions Mot. 3, 18; see Ct. Ch. R. 37(e); Ct. Ch. R. 70(b).

                                               31
Castanon’s actions were egregious, at least reckless, and prejudicial, sanctions are

appropriate.

                1.        Contempt

         “Court of Chancery Rule 70(b) authorizes the court to find a party in contempt

for the failure ‘to obey or to perform any order.’”188 “To establish civil contempt,

[the petitioning party] must demonstrate that the [alleged contemnors] violated an

order of this Court of which they had notice and by which they were bound.”189 The

petitioning party must “establish the contemptuous conduct by a preponderance of

the evidence.”190 The plaintiffs have met this burden.

         The Consent Order was entered by the court on May 27, 2022 and remained

in effect until October 20, 2022.191 Castanon had notice of the Consent Order. It

was negotiated and signed by his counsel and expressly referenced Castanon’s

188
   In re Aerojet Rocketdyne Hldgs, Inc., 2022 WL 2180240, at *21 (Del. Ch. June 16,
2022) (quoting Ct. Ch. R. 70(b)).
189
   TR Invs., LLC v. Genger, 2009 WL 4696062, at *15 (Del. Ch. Dec. 9, 2009) (quoting
Arbitrium v. Johnston, 1997 WL 589030, at *3 (Del. Ch. Sept. 17, 2009)) (alterations in
original), aff’d, 26 A.3d 180 (Del. 2011).
190
   TransPerfect Glob., Inc. v. Pincus, 278 A.3d 630, 644 (Del. 2022) (quoting Wilm. Fed’n
of Tchrs. v. Howell, 374 A.2d 832, 838 (Del. 1977)) (cleaned up).
191
      Dkts. 14, 76, 77.

                                           32
agreement to its terms.192 Castanon also acknowledged his awareness of the Consent

Order at trial.193

         The Consent Order prohibited Castanon from: (1) engaging in, assisting or

being “involved with providing any advice, consulting services, or any other services

of any kind” to Protoshop; and (2) providing “financial support to Protoshop” while

this action is pending.194 Castanon meaningfully violated these provisions by

actively overseeing and paying for work on Protoshop’s website.195

         Just two days after the Consent Order was entered, Castanon provided detailed

feedback on 26 action items to Protoshop’s website developer.196                  Castanon

continued for weeks to work with the developer on Protoshop’s website.197 On June

192
      Dkts. 13, 14; Consent Order at Recitals, Signature Page.
193
      Castanon Tr. 288.
194
   Consent Order ¶¶ 2, 3. The plaintiffs also contend that Castanon violated the Consent
Order’s prohibition on directly or indirectly taking steps to promote or advance the
commercial or business interests of Protoshop. See id. ¶ 7. In support, they cite two
LinkedIn communications. See JX 686 at 1, 2. Neither message suggests that Castanon
meaningfully solicited customers or promoted Protoshop after the Consent Order was in
place. See inTEAM Assocs., LLC v. Heartland Payment Sys., LLC, 2021 WL 5028364, at
*8 (Del. Ch. Oct. 29, 2021) (explaining that, to support a contempt finding, a “violation
must not be a mere technical one but must constitute a failure to obey the Court in a
meaningful way”).
195
     TransPerfect, 278 A.3d at 644 (“When an asserted violation of a court order is the basis
for contempt, the party to be sanctioned must be bound by the order, have clear notice of
it, and nevertheless violate it in a meaningful way.”).
196
      JX 561 at 6.
197
      Id.; JX 575.

                                              33
14, 2022, Castanon paid a $2,000 invoice to the website developer out of his

“personal account.”198

            Castanon knowingly violated the Consent Order through these actions. At

trial, Castanon initially suggested that he transitioned the website work to Ceriani.199

Perhaps recognizing that none of his email exchanges with the website developer so

much as copied Ceriani,200 Castanon changed tack. He then testified that he was

aware of the Consent Order’s requirements but believed that completing work on

Protoshop’s website was “the least of the two evils.”201 Indeed, his “higher morals”

compelled him to pay the website developer’s invoice.202

            This is no excuse for Castanon’s conduct. If morality truly moved Castanon,

he could have sought a modification of the Consent Order.203 His testimony shows

that he understood the meaning of the Consent Order and decided to disobey it by

engaging in the very conduct it barred.204

198
      JX 566.
199
      Castanon Tr. 294.
200
      JX 559; JX 561; JX 566; JX 575; Castanon Tr. 294-98.
201
      Castanon Tr. 309.
202
      Id.
203
      Consent Order ¶ 8.
204
   inTEAM Assocs., 2021 WL 5028364, at *8 (“This court has also noted in considering a
motion for contempt that ‘the Court must be satisfied that there was an ‘element of
willfulness or conscious disregard of a court order.’”).
                                             34
                2.   Spoliation

         “A party in litigation or who has reason to anticipate litigation has an

affirmative duty to preserve evidence that might be relevant to the issues in the

lawsuit.”205 Castanon likely could have anticipated litigation as early as October 7,

2021, when the plaintiffs’ counsel raised “concerns on the part of Gener8 about

[Castanon’s] compliance with his non-compete and related obligations.”206 By

October 9, there is no doubt that Castanon anticipated litigation—he told Ceriani

that he believed the plaintiffs “might sue” him.207 Castanon had, by this point,

already violated his restrictive covenants by putting the groundwork for Protoshop

in place, providing financing for Protoshop, and encouraging Isaacs and Ceriani to

leave Symbient.208 Castanon understood that the plaintiffs might accuse him of

being “in violation of the agreement” (i.e., the EPA) if he “[g]ave [Isaacs] the money

or [] was involved with the new company.”209

205
   TR Invs., 2009 WL 4696062, at *17 (quoting Beard Rsch. v. Kates, 981 A.2d 1175,
1185 (Del. Ch. May 29, 2009)).
206
    JX 314; see Kan-Di-Ki, LLC v. Suer, 2015 WL 4503210, at *29 (Del. Ch. July 22, 2015)
(finding that a defendant “had reason to anticipate litigation” “at the latest, when he began
communicating with his attorney” “about possible allegations by [the plaintiff] that [the
defendant] was breaching his noncompetition obligations”).
207
   JX 309 at 2; see Castanon Tr. 346 (admitting that, as of October 9, he knew there was
a “possibility” the plaintiffs might sue him).
208
   See supra notes 117, 120-31 and accompanying text. See also infra notes 311, 314-19
and accompanying text.
209
      JX 309 at 2.

                                             35
         Despite anticipating litigation in October 2021, Castanon failed to preserve

electronic evidence.210 He did not disable the auto-delete function on his email until

April 21, 2022.211 Worse, Castanon never stopped deleting his texts (even after

receiving Gener8’s cease and desist letter).212 Castanon produced just 12 individual

text messages—none of which were with Ceriani, Isaacs, or Taylor.213

         Ceriani’s text messages, which were not produced until the month of trial, are

among the most damning evidence in the case. They prove that Castanon routinely

texted with her, Isaacs, Taylor, and Protoshop customers.214 The texts reveal that

Castanon coordinated the timing of Isaacs’ and Ceriani’s resignations from

Symbient.215 They also show that Castanon was working directly with certain

former Symbient customers.216

210
      See JX 598 at 20-26; Castanon Tr. 315-17.
211
   Castanon Tr. 315-17. The plaintiffs argue that Castanon continued to delete emails.
They only identify a single gap in Castanon’s production after April 21, 2022: an email
between Castanon and Coagulo that Coagulo produced and Castanon did not. JX 487.
This could have been a production oversight and is not enough to find that Castanon
spoliated emails post-April 21. See Castanon Tr. 284-85; JX 593 at 2-3.
212
      Castanon Tr. 322-23.
213
      JX 687.
214
      See, e.g., JX 243; JX 246; JX 286; JX 292; JX 309; JX 374; JXs 434-35.
215
      JX 296.
216
      JXs 434-35.

                                            36
            Since Castanon deleted his texts, the record is devoid of messages sent

between Castanon and Isaacs (save one), or Castanon and Symbient customers, that

excluded Ceriani. In other words, unless Ceriani was a part of the text chain with

Castanon, relevant texts were (mostly) not produced. The prejudice to the plaintiffs

is obvious; the extent of the prejudice is unknown since the text messages are

irretrievably lost.

            Castanon’s deletion of text messages was at least reckless. To warrant

dispositive sanctions, a party must “intentionally or recklessly destroy[] evidence,

when it knows that the item in question is relevant to a legal dispute or it was

otherwise under a legal duty to preserve the item.”217 “Delaware courts have defined

recklessness in the spoliation context as a conscious awareness of the risk that one’s

action or inaction may cause evidence to be despoiled.”218 “Intentional destruction

simply means that the spoliator acted ‘with purpose.’”219

217
     Sears, Roebuck & Co. v. Midcap, 893 A.2d 542, 552 (Del. 2006); see Beard Rsch., 981
A.2d at 1192 (“[D]rawing an adverse inference is appropriate when an actor is under a duty
to preserve evidence and takes part in the destruction of evidence while being consciously
aware of a risk that he or she will cause or allow evidence to be spoiled by action or inaction
. . . .”); Ct. Ch. R. 37(e)(2).
218
      TR Invs., 2009 WL 4696062, at *17 (citing Beard Rsch., 981 A.2d at 1192).
219
      Id.

                                              37
         This is not a situation where Castanon negligently forgot to turn off auto-

delete.220 Instead, he displayed blatant disregard for his duty to preserve evidence,

compounded by a lack of candor. During his November 2022 deposition, Castanon

maintained that he is “not a texter.”221 He said that he will “reply if somebody’s

texting [him],” but “prefer[s] to talk to people.”222 When Ceriani produced her text

messages two months later, Castanon was caught in a lie.223 Castanon is, in fact, a

prolific texter. He regularly texted about Protoshop—including with Ceriani, Isaacs,

Taylor, and Protoshop customers (such as DeviceLab).224 The vast majority of texts

produced by Ceriani were missing from Castanon’s meager production.225

         Although Castanon’s failure to preserve email is less egregious, it was

likewise reckless. Castanon testified that he set up a Gmail account after leaving

Symbient and was unaware that deleted emails became permanently lost since his

220
   That is not to say that no remedy would be appropriate if Castanon permitted the
automatic deletion of messages. See Twitter, Inc. v. Musk, 2022 WL 5078278, at *5 (Del.
Ch. Oct. 5, 2022). Rather, his state of mind goes beyond negligence.
221
      Castanon Dep. 113.
222
      Id.; see also Castanon Tr. 318 (repeating the same refrain).
223
   See Pls.’ Opening Post-trial Br. (Dkt. 144) 15; compare JX 687 (all messages Castanon
produced), with JX 705 (all messages Ceriani produced).
224
      See, e.g., JX 243; JX 246; JX 286; JX 292; JX 309; JX 374; JXs 434-35.
225
   JX 705 at 340-72; see also id. at 188-372 (Ceriani’s production post-dating October 9,
2021, including text messages received and sent by Castanon). Castanon only produced a
single text with Isaacs. See Castanon Tr. 321.
                                               38
business account had preserved them.226 Given his other false and self-serving

testimony on data preservation, I find it difficult to believe him. Moreover, he took

the affirmative act of deleting emails when he knew he was under a duty to preserve

evidence.

         At trial, Castanon tried to use his spoliation to his advantage. For example,

when questioned on the first day of trial about the circumstances of Taylor’s

departure, Castanon testified unequivocally that he “didn’t talk to [Taylor] after [he]

left [Symbient] at all.”227 On the second day of trial, Castanon doubled down, saying

that he “was surprised” to discover Taylor working at Protoshop when he visited the

office.228 Yet, Castanon’s text messages—which were only available from Ceriani’s

last-minute production—show that Castanon was fully aware of Taylor’s plan to

resign from Symbient and join Protoshop.229 More strikingly, Castanon’s testimony

at trial (like at his deposition) was that he is not a “big texter” and, when he does

text, it’s “in reply to people that text” him to “play along.”230 Hundreds of texts

226
    See Castanon Tr. 284-85; JX 593 ¶ 4; JX 598 at 20-26 (admitting in interrogatory
responses that Castanon moved relevant emails to the “Trash” folder which were then
“automatically” deleted after 30 days). Notably, Castanon’s interrogatory responses make
no mention of texts.
227
      Castanon Tr. 278.
228
      Id. at 390.
229
      JX 296 at 2.
230
      Castanon Tr. 286, 318.

                                           39
produced by Ceriani prove otherwise.231 Castanon’s shifty testimony suggests that

he deleted texts (and perhaps emails) to cover his tracks.

                3.        The Appropriate Sanctions

         The plaintiffs seek sanctions against Castanon under Rule 70(b) for violations

of the Consent Order and under Rule 37(e) for spoliation. “Rule 70(b) supplies this

court with the power—and broad latitude—to remedy violations of its orders.”232

“A trial judge has broad discretion to impose sanctions for failure to abide by its

orders” provided the sanctions are “just and reasonable.”233 Rule 37(e) allows the

court to make an adverse inference or enter a default judgment “upon finding

prejudice to another party from loss of information" and when a “ party acted

recklessly or with the intent to deprive another party of the information’s use in the

litigation.”234

         “Sanctions serve three functions: a remedial function, a punitive function, and

a deterrent function.”235 With these purposes in mind, the court considers the

offending party’s culpability, the complaining party’s prejudice, and the availability

231
      See, e.g., JX 310; JX 454; JX 628; JX 630; JX 705.
232
      TR Invs., 2009 WL 4696062, at *15; see Ct. Ch. R. 70(b).
233
      Gallagher v. Long, 940 A.2d 945 (Del. 2007) (TABLE).
234
      Ct. Ch. R. 37(e).
235
      Beard Rsch., 981 A.2d at 1189.

                                             40
of lesser sanctions to avoid unfairness while serving as a deterrent.236                 The

recklessness of Castanon’s conduct and the resulting prejudice to the plaintiffs is

addressed above. That leaves the matter of tailoring an appropriate remedy “to the

degree of culpability of [Castanon] and the prejudice suffered by” the plaintiffs.237

         I decline to grant a default judgment. “Entry of a judgment against the

spoliating party should be regarded as ‘a last resort.’”238 “[A] motion for such relief

should be ‘granted only if no other sanction would be more appropriate under the

circumstances.’”239 This extreme sanction is unwarranted here, after a full trial was

conducted where the plaintiffs were able to adduce substantial alternative evidence

to prove their case in chief.240

         The lesser sanction of adverse inferences is, however, warranted for

Castanon’s spoliation. The Delaware Supreme Court has explained that:

236
    Id. (“[T]he Court will consider the following factors in determining the appropriate
sanctions: (1) the culpability or mental state of the party who destroyed the evidence;
(2) the degree of prejudice suffered by the complaining party; and (3) the availability of
lesser sanctions which would avoid any unfairness to the innocent party while, at the same
time, serving as a sufficient penalty to deter the conduct in the future.”).
237
      Id. at 1189-90.
238
      Id. at 1190; see TR Invs., 2009 WL 4696062, at *19.
239
      Beard Rsch., 981 A.2d at 1190; see TR Invs., 2009 WL 4696062, at *19.
240
    Cf. BDO USA, LLP v. EverGlade Glob., Inc., 2023 WL 1371097, at *14 (Del. Super.
Jan. 31, 2023) (awarding a default judgment where there was “no direct evidence” for the
plaintiff’s case in chief and because “[t]o prove [their case], [plaintiff] should not have to
rely on circumstantial evidence, which [wa]s all that [wa]s left”).
                                             41
         An adverse inference instruction is appropriate where a litigant
         intentionally or recklessly destroys evidence, when it knows that the
         item in question is relevant to a legal dispute or it was otherwise under
         a legal duty to preserve the item.241

That is the situation here. Castanon recklessly destroyed evidence. He then sought

to capitalize on his misconduct by providing false testimony at trial. Accordingly, I

draw limited adverse inferences that the lost information would support findings that

Castanon solicited Symbient employees and customers.242 The specific inferences

that I deem appropriately tailored to address Castanon’s culpability and the resulting

prejudice to the plaintiffs are noted in my analysis of the plaintiffs’ claims below.

         As a sanction for contempt of the Consent Order, Castanon must pay the fees

and expenses incurred by the plaintiffs’ counsel in moving for sanctions.243 Doing

so will serve a remedial purpose: the plaintiffs will not be forced to bear the costs of

bringing Castanon’s contumacious behavior to light and will be given some

241
      Midcap, 893 A.2d at 552.
242
    See, e.g., Beard Rsch., 981 A.2d at 1192 (drawing an adverse inference where the
defendant deleted information, replaced his hard drive, and failed to maintain the original
despite receiving prior notice that the data could be discoverable); Triton Constr. Co., Inc.
v. E. Shore Elec. Servs., Inc., 2009 WL 1387115, at *8 (Del. Ch. May 18, 2009) (drawing
adverse inferences where the defendant deleted files on his work computer and failed to
preserve data on a thumb drive and home computer containing relevant information), aff’d,
988 A.2d 938 (Del. 2010); Kan-Di-Ki , 2015 WL 4503210, at *28-30 (drawing “narrowly
tailored [adverse] inferences” where the defendant failed to preserve text messages that
could have contained evidence of his alleged breaches of restrictive covenants).
243
      See infra note 244 and accompanying text.

                                             42
recompense for his actions.244 This sanction is also appropriate due to Castanon’s

spoliation. “To impose monetary sanctions, this Court need only find that a party

had a duty to preserve evidence and breached that duty . . . .”245

         B.     Breach of Contract

         The plaintiffs contend that Castanon breached the non-competition provisions

in the EPA and Operating Agreement and the non-solicitation provisions in the EPA.

As an initial matter, Castanon objects to the plaintiffs’ attempt to hold him liable for

breaching the Operating Agreement since no such claim is in the Complaint. His

objection is well placed.246

         The Complaint advances a breach of contract claim based on the EPA alone.247

The plaintiffs aver that they may nonetheless pursue relief under the Operating

244
    See Mitchell Lane Publ’rs, Inc. v. Rasemas, 2014 WL 4804792, at *3 (Del. Ch. Sept.
26, 2014) (“When dealing with alleged civil contempt, sanctions should only ‘be directed
towards coercing compliance with the order being violated and remedying the injury
suffered by other parties as a result of the contumacious behavior.’” (quoting Aveta Inc. v.
Bengoa, 986 A.2d 1166, 1188 (Del. Ch. 2009))); see also Isr. Disc. Bank of N.Y. v. First
State Depository Co., LLC, 2013 WL 2326875, at *28 (Del. Ch. May 29, 2013) (“An award
of counsel fees is also a proper consideration for civil contempt.”) (cleaned up); Bruckel v.
TAUC Hldgs., LLC, 2023 WL 4583575, at *14-16 (Del. Ch. July 17, 2023) (awarding
attorneys’ fees as a sanction for the defendant’s contempt of a court order requiring the
production of certain books and records); Aveta, 986 A.2d at 1188 (awarding attorneys’
fees where the defendant was found in contempt of a court order mandating arbitration).
245
      Beard Rsch., 981 A.2d at 1194.
246
      The plaintiffs have not moved to supplement the Complaint under Rule 15(d).
247
      Am. Compl. ¶¶ 123-40.

                                             43
Agreement as an “ancillary agreement” to the EPA.248 This argument is, however,

based on a tortured reading of the EPA, which does not expressly mention the

Operating Agreement.249 In any event, the plaintiffs waited until the eve of trial to

claim that Castanon breached the non-compete provision in the Operating

Agreement.250 Castanon lacked prior notice of this possibility. Tellingly, the

Amended Complaint addresses the EPA 44 times but does not mention the Operating

Agreement once.251        The plaintiffs’ attempt to raise violations of a separate

agreement with a different non-compete provision came too late.252 Thus, I only

consider whether Castanon breached the restrictive covenants in the EPA.

248
      See PTO ¶ VI.2.
249
   See EPA § 9.2 (addressing indemnification for breaches of “ancillary agreements”).
The EPA does not expressly incorporate the Operating Agreement’s terms—or even
mention the Operating Agreement. To invoke Section 9.2 in the first place, the plaintiffs
would need to prove a breach of the Operating Agreement (assuming it is an “ancillary
agreement” to the EPA). But they neglected to press a claim for breach of the Operating
Agreement.
250
   The plaintiffs first raised this theory in a draft pre-trial order on January 12, 2023. PTO
¶ VI.5.
251
   Am. Compl. ¶¶ 7-8, 12, 26-29, 33-34, 37-40, 43-44, 82, 88, 101, 103, 114, 116, 119-20,
124-34, 139, 142-45, 151, 163.
252
    See Zutrau v. Jansing, 2014 WL 6901461, at *7 (Del. Ch. Dec. 8, 2014) (“Pleadings are
intended to provide fair notice to the opposing party of the legal and factual theories and
claims to be litigated.”), aff’d, 123 A.3d 938 (Del. 2015). Had the plaintiffs moved to
amend the Complaint under Rule 15(d), I would have denied their request because of the
prejudice to Castanon. See Those Certain Underwriters at Lloyd’s, London v. Nat’l
Installment Ins. Servs., Inc., 2008 WL 2133417, at *9 (Del. Ch. May 21, 2008) (denying a
request to amend under Rule 15(a) where the “belated addition” of a claim “would cause
undue prejudice” to the non-movant), aff’d, 962 A.2d 916 (Del. 2008). Castanon was
deprived of the opportunity to answer and pursue discovery (including expert discovery)
                                             44
         The parties agree that Delaware law applies to the EPA, which contains a

Delaware choice of law provision.253 “Under Delaware law, the elements of a breach

of contract claim are: 1) a contractual obligation; 2) a breach of that obligation by

the defendant; and 3) a resulting damage to the plaintiff.”254 The plaintiffs bear the

burden of proving these elements “by a preponderance of the evidence.”255

         “Delaware law adheres to the objective theory of contracts,” meaning that “a

contract’s construction should be that which would be understood by an objective,

reasonable third party.”256 “When interpreting a contract, [the] Court ‘will give

priority to the parties’ intentions as reflected in the four corners of the

related to a purported violation of the Operating Agreement. See PharmAthene, Inc. v.
SIGA Techs., Inc., 2011 WL 6392906, at *2 (Del. Ch. Dec. 16, 2011) (“The general rule .
. . that a party waives any argument it fails properly to raise shows deference to fundamental
fairness and the common sense notion that, to defend a claim or oppose a defense, the
adverse party deserves sufficient notice of the claim or defense in the first instance.”); Zhou
v. Deng, 2022 WL 1024809, at *6 (Del. Ch. Apr. 6, 2022) (“Arguments that are not raised
until pre-trial briefing or after may be deemed waived by the Court. By that time, the
opposing party has already shaped his trial plans, and it is simply too late and unfair to
expect him meaningfully to confront the arguments so close to (or after) trial.” (citing ABC
Woodlands L.L.C. v. Schreppler, 2012 WL 3711085, at *3 (Del. Ch. Aug. 15, 2012))),
aff’d, 287 A.3d 633 (Del. 2022).
253
    Def.’s Pre-trial Br. (Dkt. 134) 41-42; Pls.’ Opening Pre-trial Br. (Dkt. 121) (“Pls.’ Pre-
trial Br.”) 23; EPA § 10.8; see also Operating Agreement § 11.6 (applying Delaware law).
The EPA also provides that “any claim” relating to the agreement would “be brought solely
in [the] Delaware Court of Chancery.” EPA § 10.6(a).
254
      H-M Wexford LLC v. Encorp, Inc., 832 A.2d 129, 140 (Del. Ch. 2003).
255
      Zimmerman v. Crothall, 62 A.3 676, 691 (Del. Ch. 2013).
256
   Salamone v. Gorman, 106 A.3d 354, 367-68 (Del. 2014) (quoting Osborn ex rel. Osborn
v. Kemp, 991 A.2d 1153, 1159 (Del. 2010)).
                                              45
agreement.’”257 The court must construe the contract “as a whole and . . . will give

each provision and term effect, so as not to render any part of the contract mere

surplusage.”258

         With these principles in mind, I turn to the EPA provisions at issue.

                1.    Engaging in a Restricted Business

         Section 6.8(a) of the EPA prohibits Castanon from “directly or indirectly”

“engag[ing] in” a “Restricted Business in the Territory” or “assist[ing] others in

engaging in the Restricted Business in the Territory” for five years.259 Castanon

does not challenge the enforceability of the restrictive covenant or the

reasonableness of its scope.260 The parties’ dispute centers on (1) whether Protoshop

is a “Restricted Business” and, if so, (2) whether Castanon was “directly or

indirectly” engaging in or assisting with it.

257
   Salamone, 106 A.3d at 368 (quoting GMG Cap. Invs., LLC v. Athenian Venture P’rs I,
L.P., 36 A.3d 776, 779 (Del. 2012)).
258
   Osborn, 991 A.2d at 1159 (quoting Kuhn Constr., Inc. v. Diamond State Port Corp.,
2010 WL 779992, at *2 (Del. Mar. 8, 2010)).
259
      EPA § 6.8(a).
260
    Pls.’ Pre-trial Br. 30-32; Def.’s Pre-trial Br. 41 (“[T]he Restrictive Covenants in the
EPA fall within the exception set forth in Cal. Bus. & Prof. Code § 16601, relating to the
sale of a business.”); see id. at 43-44, 46 n.16; Def.’s Post-trial Br. (Dkt. 151) 19.
                                            46
                       a.       Whether Protoshop is a “Restricted Business”

         The EPA defines “Restricted Business” to mean “contract design engineering

and manufacturing of medical and life science devices.”261 Castanon insists that

Protoshop does not fall within this definition because it neither design engineers nor

manufactures such devices.262 For the most part, his arguments reduce to nothing

more than “persistent definitional smoke bombs” that obfuscate both the nature of

Symbient’s and Protoshop’s businesses and the concept of “design engineering.”263

After clearing away the smoke, it is apparent that Protoshop contract design

engineers medical and life science devices. It is a Restricted Business.

                            i.        Conjunctive or Disjunctive “And”

         A threshold question is whether the word “and” in the phrase “contract design

engineering and manufacturing” is conjunctive or disjunctive.264 That is, must a

Restricted Business engage in both design engineering and manufacturing? Or can

261
      EPA § 10.1(a).
262
    Def.’s Post-trial Br. 20-22. The plaintiffs’ post-trial reply brief also asserts that
Protoshop was a “manufacturer.” See Pls.’ Post-trial Reply Br. (Dkt. 155) 17-19. This
argument is missing from their opening post-trial brief, amounting to a waiver. See In re
IBP, Inc. S’holders Litig., 789 A.2d 14, 62 (Del. Ch. 2001). Regardless, the notion that
Protoshop was a “manufacturer” because it fabricated prototype molds is inconsistent with
the notion that Symbient did not engage in manufacturing pre-acquisition.
263
      See Jurkiewicz Tr. 695.
264
      EPA § 10.1(a).

                                              47
a Restricted Business provide either design engineering or manufacturing services?

Castanon invokes the former approach while the plaintiffs take the latter.

         “[A]lthough ‘and’ typically bears a conjunctive meaning, that presumption

can be overcome by context.”265 “[C]ourts interpret ‘and’ in the disjunctive sense to

prevent an absurd or unreasonable result, or to give effect to the parties’ intent and

reasonable expectations.”266 Here, a disjunctive interpretation of “and” is supported

by context and the absurdity that would result from a conjunctive reading.

         At the time of its acquisition by Gener8, Symbient did not engage in contract

manufacturing.267        Construing “and” conjunctively would therefore exclude

Symbient from the scope of the EPA’s noncompete.268 It would have been illogical

265
   Weinberg v. Waystar, Inc., 294 A.3d 1039, 1045 (Del. 2023); see also Peacock v.
Lubbock Compress Co., 252 F.2d 892, 893 (5th Cir. 1958) (“[T]he word ‘and’ is not a word
with a single meaning, for chameleonlike, it takes its color from its surroundings.”).
266
    Weinberg, 294 A.3d at 1045 (rejecting a “joint” interpretation of “and” that would
produce an “absurd or unreasonable result”); see, e.g., Slodov v. United States, 436 U.S.
238, 250 (1978) (construing “and” as used in Section 6672 of the Internal Revenue Code
as disjunctive); Peacock, 252 F.2d at 895 (construing “and” disjunctively in the Fair Labor
Standards Act). An example raised at trial highlights the point: “[I]f you asked me . . .
what kind of fruit do you like? And I say, I like apples and bananas, you don’t infer that I
like apples and bananas together. I like apples, or, separately, I like bananas.” Finley
Tr. 28.
267
    See supra notes 17, 33 and accompanying text. One can imagine an argument that the
restrictive covenant is overbroad if it included services Symbient did not provide at the
time of contracting. See Kodiak Bldg. P’rs, LLC v. Adams, 2022 WL 5240507, at *8 (Del.
Ch. Oct. 6, 2022) (“In the context of a sale of a business, the acquirer has a legitimate
economic interest with regard to the assets and information it acquired in the sale.”). No
such argument was raised by either party.
268
      See Finley Tr. 25-26; Hylant Tr. 715; cf. supra note 267 and accompanying text.

                                             48
for Gener8 to define the term Restricted Business to exclude the very business it was

acquiring.

         Further, when the EPA was being negotiated, the parties expected that

Symbient would achieve manufacturing capabilities in the future.269 Post-closing,

Symbient worked to add “contract manufacturing” as an additional, elective option

to its development process.270          When that process was complete, Symbient’s

customers could choose “contract design engineering” or “contract manufacturing”

or both. As such, it is reasonable that Gener8 bargained for a definition of Restricted

Business that included “design engineering” or “manufacturing.”

                           ii.       “Design Engineering”

         The next step is construing the meaning of “contract design engineering” in

the definition of Restricted Business.271 The word “contract” means contracting with

and performing services for third party clients.272 Protoshop undoubtedly provided

269
      See supra note 60 and accompanying text.
270
      See supra notes 59, 61 and accompanying text.
271
    The word “contract” modifies both “design engineering” and “manufacturing.” See
Facebook, Inc. v. Duguid, 141 S. Ct. 1163, 1169 (2021) (“Under conventional rules of
grammar, ‘[w]hen there is a straightforward, parallel construction that involves all nouns
or verbs in a series,’ a modifier at the end of the list ‘normally applies to the entire series.’”
(quoting A. Scalia & B. Garner, Reading Law: The Interpretation of Legal Texts 147
(2012))); see also Pls.’ Post-trial Reply Br. 14-16; Def.’s Pre-trial Br. 44 n.15.
272
   Pls.’ Opening Post-trial Br. 27; Pls.’ Post-trial Reply Br. 15; Def.’s Post-trial Br. 44-
45 n.19; see also Contract, Merriam-Webster, https://www.merriam-webster.com/
dictionary/contract (last visited Sept. 26, 2023) (defining “contract” as “to establish or
undertake by contract,” “to hire by contract,” and “to purchase (goods, services, etc.) on a
                                               49
contract services to its customers.273         Whether those services were “design

engineering” is less straightforward.

       Although the parties advance different interpretations of the phrase “design

engineering,” neither argues that the phrase is ambiguous.274 “A contract is not

rendered ambiguous simply because the parties do not agree upon its proper

construction.”275 “Clear and unambiguous language . . . should be given its ordinary

and usual meaning.”276 “But where a word has attained the status of a term of art

contract basis”); see also Contract, Cambridge Dictionary, https://dictionary.
cambridge.org/us/dictionary/english/contract (last visited Sept. 26, 2023) (defining
“contract” as “to make a legal agreement with someone to do work or to have work done
for you”).
273
    See infra notes 281, 333-34 and accompanying text (noting that Protoshop performs
part design and prototype molding services and offers these services to customers who are
in the medical device and life sciences fields).
274
     See, e.g., Pls.’ Pre-trial Br. 37 (“[A] Restricted Business includes a company that
contracts with customers to engineer the design of their medical or life science devices,
including molds and prototypes of those devices or components of devices.”); Def.’s
Post-trial Br. 4 (“Trial proved Symbient is a contract design engineering firm specializing
in the design and development of prototypes of disposable medical and life sciences
devices: it designs and develops medical/life science devices (from the concept stage)
through its engineers, whose billable hours constitute Symbient’s primary source of
revenue.”); id. at 17 (“Trial proved that the definition of ‘Restricted Business’ is tied to
Symbient, which is a contract design engineering firm specializing in medical and life
sciences devices: it designs medical/life science devices (from the concept stage) through
its engineers, whose billable hours constitute Symbient’s primary source of revenue.”).
275
   Rhone-Poulenc Basic Chems. Co. v. Am. Motorists Ins. Co., 616 A.2d 1192, 1195 (Del.
1992).
276
   Lorillard Tobacco Co. v. Am. Legacy Found., 903 A.2d 728, 738 (Del. 2006) (“Under
well-settled case law, Delaware courts look to dictionaries for assistance in determining
the plain meaning of terms which are not defined in a contract.”).
                                            50
and is used in a technical context, the technical meaning is preferred over the

common or ordinary meaning.”277

       As a general matter, the term “design” means “to create, fashion, execute, or

construct according to plan.”278        “Engineering” typically means “to lay out,

construct, or manage as an engineer.”279 More technically speaking, according to

the McGraw-Hill Dictionary of Scientific and Technical Terms, “design

engineering” is “[a] branch of engineering concerned with the creation of systems,

devices, and processes useful to and sought by society.”280

277
    Viking Pump, Inc. v. Liberty Mut. Ins. Co., 2007 WL 1207107, at *13 (Del. Ch. Apr. 2,
2007) (citing Madison Ave. Leasehold, LLC v. Madison Bentley Assocs. LLC, 30 A.D.3d
1, 8 (N.Y. App. Div. 2006)).
278
    Design, Merriam-Webster, https://www.merriam-webster.com/dictionary/design (last
visited Sept. 26, 2023).
279
     Engineer, Merriam-Webster, https://www.merriam-webster.com/dictionary/engineer
(last visited Sept. 26, 2023). As a noun, “engineer” means “a person who is trained in or
follows as a profession a branch of engineering.” Id.
280
   Design engineering, McGraw-Hill Dictionary of Scientific & Technical Terms (5th ed.,
1994). Engineering textbooks provide a similar description of design engineering. See
Pharm. Prod. Dev., Inc. v. TVM Life Sci. Ventures VI, L.P., 2011 WL 549163, at *3 (Del.
Ch. Feb. 16, 2011) (consulting textbooks to determine the “ordinary meaning” of an
unambiguous contractual term). For example, one textbook describes design engineering
as a “set of decision-making processes and activities used to determine the form of an
object given the functions desired by the customer.” Rudolph J. Eggert, Engineering
Design 2 (2005). Other professional journals and textbooks are in accord. See Clive L.
Dym et al., Engineering Design Thinking, Teaching, and Learning, 94 J. Eng’g Educ. 103,
104 (2005) (“Engineering design is a systematic, intelligent process in which designers
generate, evaluate, and specify concepts for devices, systems, or processes whose form and
function achieve clients’ objectives or users’ needs while satisfying a specified set of
constraints.”); Arvid R. Eide et al., Engineering Fundamentals and Problem Solving 79
(4th ed., 2002) (“Engineering design is a systematic process by which solutions to the needs
                                            51
       The trial record demonstrates that Protoshop provides such services.

Protoshop advertises its “optional” “[p]art design assistance,” touting that its

“engineers have extensive plastic part design experience over thousands of parts”

and stand “ready to help [customers] develop a part design that meets [their]

requirements.”281 Customers seeking part design assistance come to Protoshop with

an idea and “desired needs and specifications with constraints.” 282 Protoshop then

engages in part design and creates the accompanying mold and tangible plastic parts

that meet the customer’s specifications.

       Some Protoshop customers skip the part design assistance step. But even

when a customer comes to Protoshop with an initial design in hand, Protoshop often

modifies it during a moldability review.283 Moldability review is an iterative

process: as the mold evolves, so does the part design, which affects the mold that, in

of humankind are obtained. . . . The design process is applied to problems (needs) of
varying complexity.”).
281
   JX 530 at 9; JX 645 at 2; JX 549 at 4 (“[W]e created Protoshop with the goal that we
are going to provide plastic part design and material selection assistance to better ensure
that our customers yield parts that are going to be successful in their application.”).
282
    Criteria for Accrediting Engineering Programs, Accreditation Board for Engineering
and      Technology       4     (2019),    https://www.abet.org/accreditation/accreditation-
criteria/criteria-for-accrediting-engineering-programs-2020-2021/.
283
   See JX 406 (Castanon: “Just once I’d like to see CAD models that don’t need
changes.”); Ceriani Tr. 540-41.
                                            52
turn, affects the part.284 Thus, mold design—including moldability review—is a

type of design engineering. The key difference between mold design and part design

assistance is that in the former case, the customer comes to Protoshop with more

developed specifications.

       Castanon offered the testimony of Dr. Richard Anderson to refute this

conclusion. Anderson opined that “design engineering would be encompassed in

Phases 1 and 2” of Symbient’s five-phase development cycle.285 According to

Anderson, Protoshop did not provide design engineering because it only performed

Phase 3 tasks. But Anderson’s interpretation of “design engineering” is at odds with

the plain meaning of the phrase.286 Symbient’s process was just one possible

implementation of the design engineering process.287              Regardless, even under

284
    JX 530 at 5 (“Mold iterations encouraged as the design evolves[.]”); id. at 9 (“Request
rapid mold iterations as needed[.]”); JX 645 at 2 (“Rapid mold iterations”: “Our molds are
intended to allow for quick iterations to part geometry, typically in just 1 day.”).
285
   Anderson Tr. 855-58; see also JX 663 at 24 (stating that “without completing all of the
deliverables and tasks completed from [Phases 1 and 2], one cannot be said to have
performed Design Engineering”).
286
    See supra note 280. Insofar as Anderson is testifying about contract interpretation, I
give it no weight. See United Rentals, Inc. v. RAM Hldgs., Inc., 2007 WL 4465520, at *1
(Del. Ch. Dec. 13, 2007) (“This Court . . . has made it unmistakably clear that it is improper
for witnesses to opine on legal issues governed by Delaware law.”). Anderson’s testimony
must also be viewed in the context of his longstanding relationship with Castanon. The
two are co-inventors on a medical device patent. Anderson Tr. 870-71.
287
    See, e.g., Clive L. Dym & Patrick Little, Engineering Design: A Project-Based
Introduction 26 (John Wiley & Sons 2d ed. 2004).
                                             53
Anderson’s interpretation, Protoshop engages in design engineering when it advises

clients on changes to their CAD models.288

                          iii.        “Medical and Life Science Devices”

         The phrase “medical and life science devices” is the final part of the Restricted

Business definition.289          “Medical” means “of, relating to, or concerned with

physicians or the practice of medicine.”290 “Life sciences” means “a branch of

science (such as biology, medicine, and sometimes anthropology or sociology) that

deals with living organisms and life processes.”291 It is undisputed that Protoshop

288
   See Ceriani Tr. 473, 529-30, 539-41. At trial, Castanon testified that mold design and
moldability review were not design engineering because “the responsibility for the design
changes stays with the customer.” Castanon Tr. 264-65; see also Ceriani Tr. 472. The
weight of the evidence, however, shows that Protoshop controlled mold design, which
affected part design. E.g., JX 663 at 29 (“Mold design review feedback falls into two
categories: 1) changes that are mandatory in order to proceed with mold fabrication; and
2) changes that are optional, but which are recommended to reduce the risk of molding
defects.”). Part and mold design generally changed during moldability review. Ceriani Tr.
473-74; JX 406 at 2.
289
      EPA § 10.1(a).
290
     Medical, Merriam-Webster, https://www.merriam-webster.com/dictionary/medical
(last visited Sept. 26, 2023); see also Medical, Cambridge Dictionary,
https://dictionary.cambridge.org/us/dictionary/english/medical (last visited Sept. 26, 2023)
(defining “medical” as “related to the treatment of illness and injuries”).
291
      Life science, Merriam-Webster, https://www.merriam-webster.com/dictionary/
life%20sciences (last visited Sept. 26, 2023); see also Life science, Cambridge Dictionary,
https://dictionary.cambridge.org/us/dictionary/english /life-science?q=life+sciences (last
visited Sept. 26, 2023) (defining “life science” as “one of the types of science that deal
with the structure and behavior of living things, such as botany, zoology, biochemistry, and
anthropology”).
                                             54
worked with medical and life science customers.292 Finally, a “device” is “a piece

of equipment or a mechanism designed to serve a special purpose or perform a

special function.”293 Prototype parts and prototype molds fall within that definition.

         Anderson testified that the reference to “medical devices” in the definition of

Restricted Business refers to “finished medical devices” as defined by the Food and

Drug Administration (FDA).294 He opined that “finished medical devices” do not

include parts of devices, molds, or prototypes.295 But there is no evidence that the

EPA incorporates FDA regulatory definitions. The FDA is unmentioned in the

EPA.296 Moreover, according to Anderson, the FDA also does not define “life

sciences devices” or regulate them.297

292
      See JX 530 at 3, 11; infra notes 334, 341 and accompanying text.
293
    Device, Merriam-Webster, https://www.merriamwebster.com/dictionary/device (last
visited     Sept.    26,   2023);    see    also     Device,    Cambridge       Dictionary,
https://dictionary.cambridge.org/us/dictionary/english/device (last visited Sept. 26, 2023)
(defining “device” as “an object or machine that has been invented for a particular
purpose”).
294
      JX 663 at 13; see also JX 631; Anderson Tr. 827-28.
295
    JX 663 at 12-13; Anderson Tr. 836, 883-84. Anderson acknowledged that his
interpretation of “medical device” would mean that Restricted Business excludes
Symbient’s business at the time of the acquisition when it did not make finished medical
devices. Anderson Tr. 886-88. Adopting Anderson’s interpretation would therefore render
the definition of Restricted Business absurd. See supra notes 267-69 and accompanying
text.
296
      Anderson Tr. 883-84.
297
      Id. at 884.

                                             55
                       b.      Whether Castanon “Directly or Indirectly” Engaged in or
                               Assisted With Protoshop’s Business

         The evidence of Castanon’s direct and indirect involvement in Protoshop is

overwhelming. Castanon admitted that he gave “substantial” startup assistance to

Protoshop.298       He filed Protoshop’s corporate formation documents, set up

Protoshop’s email accounts and web domain, researched health insurance plans for

Protoshop employees, sought out and ordered equipment, and secured office

space.299      His own contemporaneous messages confirm his involvement and

repeatedly take credit for Protoshop.300 Through these actions, he violated Section

6.8(a)(i) of the EPA.301

298
    Castanon Tr. 350-51 (“I didn’t say I didn’t have involvement with [Protoshop]. I
completed approximately—my guess is that I helped set up about 20 percent of their startup
tasks. I mean, I provided substantial startup help.”); see id. at 400 (“I’ve said many, many
times, I helped them get started. I helped them with startup tasks.”); id. at 401 (“No, I’m
not in the background. I’m here in text messages. I’m interacting with vendors. There’s
nothing hidden here. I helped them. I admitted I helped them.”); id. at 438-39 (discussing
a text message sent from Castanon to Ceriani where he noted “[t]oday I’m working on
website content for phase 1.5 and providing information for [search engine optimization],
[pay per click] and social media”); see also id. at 280, 376, 398.
299
      See supra Section I.I.
300
   See supra notes 156-58 and accompanying text; see also JX 686 (“After 20+ years in
the molding business, I just launched a new take on mold fabrication (ProtoShopInc) that
means prototype molds getting fabricated in 3‐5 days and mold iterations within 1‐2 days.
I’m reaching out to get connected with engineers as I build out ProtoShop. Love to give
you a glimpse at how we are solving some of the biggest headaches I dealt with all those
years on the client side of the table.”).
301
   See, e.g., Sorrento Therapeutics, Inc. v. Mack, 2023 WL 5670689, at *19 (Del. Ch. Sept.
1, 2023) (describing a restrictive covenant barring a party from “directly or indirectly”
engaging in competitive activity as “broad” and noting that “[a]ctivities undertaken in an
effort to prepare a product to compete constitute an activity indirectly competitive with [the
                                             56
         Castanon also breached Section 6.8(a)(ii) because he “directly or indirectly”

has “an interest in [a] Person that engages directly or indirectly in the Restricted

Business in the Territory in any capacity.”302 Arguably, Castanon had a direct

financial interest in Protoshop. He personally took on the lease for Protoshop’s

office,303 guaranteed equipment loans for Protoshop,304 and made thousands of

dollars of purchases for Protoshop using his own funds.305 Regardless, Castanon has

a “direct or indirect interest” in Isaacs (his stepson and the recipient of a substantial

loan from Castanon as the “rich uncle”), who owns 75% of Protoshop. 306

                                *            *                *

         Protoshop is a Restricted Business that Castanon took part in. Castanon’s

hyper-technical arguments to the contrary are belied by both the text of the contract

and common sense. The evidence shows that Protoshop serves as a partial market

company]”); Tristate Courier & Carriage, Inc. v. Berryman, 2004 WL 835886, at *9, *14
(Del. Ch. Apr. 15, 2004) (holding that a former employee “indirectly competed with” his
former employer “by assisting in the development of a company offering services
substantially similar to those offered by” the former employer); Kan-Di-Ki, 2015 WL
4503210, at *21 (concluding that a defendant violated a restrictive covenant barring him
from “engag[ing] directly or indirectly in all or any portion of the Business” where the
defendant indirectly competed by helping the third-party company transition away from
the plaintiff’s services to other vendors).
302
      EPA § 6.8(a)(ii).
303
      PTO ¶ II.C.52.
304
      Id. ¶¶ II.C.72-73.
305
      See supra note 131 and accompanying text.
306
      See Castanon Tr. 321, 335-37; see also PTO ¶ II.C.74.

                                             57
substitute for many of Symbient’s services.307 Protoshop provides an approach that

shortened both the “on ramp” and “off ramp” for Symbient projects.308 Protoshop’s

efforts to participate in the same business as Symbient is especially apparent from

its use of Symbient product images to advertise for its services.309 Plainly, Protoshop

aims to provide the same products to clients in the same industries as Symbient.

         Castanon admittedly provided extensive assistance to Protoshop. He led

efforts to establish Protoshop as a business and set up its physical space. He

repeatedly provided financial assistance. And he has an interest in Isaacs by way of

a substantial loan. Accordingly, Castanon breached Section 6.8(a) of the EPA.

               2.     Solicitation of Employees

         Section 6.8(b) of the EPA prohibits Castanon from “directly or indirectly”

“hir[ing] or solicit[ing] any employee of [Symbient] or encourag[ing] any such

employee to leave such employment or hir[ing] any such employee who has left such

employment.”310 At the very least, Castanon breached this provision by encouraging

Isaacs, Ceriani, and Taylor to leave Symbient.311

307
    Helm Tr. 120-21; JX 122 (estimating $1.3 million from “prototype fabrication
services”); JX 44 at 11 (estimating total revenue of $6.8 million).
308
      See supra notes 140-46 and accompanying text.
309
      See supra note 159 and accompanying text.
310
      EPA § 6.8(b).
311
   Castanon’s actions can also be viewed as indirect solicitation of Ceriani and Isaacs. See
Solicit, Merriam-Webster, https://www.merriam-webster.com/dictionary/solicit (last
visited Sept. 26, 2023) (defining “solicit” as “to entice or lure”); Solicit, Cambridge
                                            58
         To “encourage” means to “attempt to persuade”312 or “make someone more

likely to do something.”313 Although Isaacs and Ceriani said they left Symbient for

Protoshop of their own volition,314 the record demonstrates that Castanon was the

instigator. Castanon provided the financial means for Isaacs and Ceriani to leave

Symbient.315 He also provided the necessary business support, involving himself in

the mechanics of starting Protoshop.316

         Castanon even coordinated the timing of Isaacs’ and Ceriani’s resignations.

On October 1, Castanon texted Ceriani: “Jimmy needs to do stuff like set up

machines and build the mold base so we needed him to quit today.”317 Isaacs quit

Dictionary, https://dictionary.cambridge.org/us/dictionary/english/solicit (last visited Sept.
29, 2023) (defining “solicit” as “to ask for something in a persuasive and determined
way”); see also Mountain W. Series of Lockton Cos., LLC v. Alliant Ins. Servs., Inc., 2019
WL 2536104, at *13, *23 (Del. Ch. June 20, 2019) (granting a motion for preliminary
injunction against a defendant who was aided by several of the plaintiff’s high ranking
members in soliciting employees and coordinating their resignation from plaintiff); Hough
Assocs., Inc. v. Hill, 2007 WL 148751, at *16 (Del. Ch. Jan. 17, 2007) (describing a
defendant’s conduct assisting his new employer in soliciting his former “subordinates” as
“easily fit[ting]” within the terms of restrictive covenants).
312
   Encourage, Merriam-Webster,               https://www.merriam-webster.com/dictionary/
encourage (last visited Sept. 26, 2023).
313
   Encourage, Cambridge Dictionary,         https://dictionary.cambridge.org/us/dictionary/
english/encourage (last visited Sept. 26, 2023).
314
      Isaacs Tr. 170, 175-76, 187-88; Ceriani Tr. 488-92.
315
      See supra Section I.I.
316
      PTO ¶¶ II.C.40, 45, 51-52.
317
      JX 296 at 2.

                                              59
the same day.318 Castanon also advised Ceriani that she “may want to put [her

resignation] in too” so that she could “take a week or two off as a break” and “come

in refreshed.”319

            In addition, the documentary evidence proves that Castanon made it more

likely that Taylor would leave Symbient.320 On October 1, Castanon texted Ceriani:

“I think Jenn [Taylor] is quitting early next week because she wants a gap between

jobs.”321 On October 19—the day Taylor left Symbient—Castanon texted Ceriani

to inform her of Taylor’s health insurance status.322 Castanon clearly knew about

and (at least indirectly) helped facilitate Taylor’s resignation.

            Finally, as to Lupercio and Ancheta, there is little evidence that Castanon

either solicited them to join Protoshop or encouraged them to leave Symbient. But

given that Castanon knew Lupercio and knew of Ancheta from Symbient and was

pulling the strings at Protoshop, it is reasonable to infer that deleted evidence would

show he directly or indirectly solicited them.323 Castanon’s lost texts with Isaacs,

318
      Id.
319
      Id.
320
   Castanon and Taylor testified to the contrary. See Taylor Tr. 708; Castanon Tr. 278.
Castanon’s testimony is not credible. And Taylor seems to have been unaware of
Castanon’s involvement behind the scenes.
321
      JX 296 at 2.
322
      JX 322.
323
      Castanon Tr. 432-33; see Pls.’ Post-trial Reply Br. 7; see supra Section II.A.2-3.

                                               60
for example, may have referenced these hires. I draw this adverse inference as a

sanction for Castanon’s spoliation.

                3.    Solicitation of Customers

         Section 6.8(c) of the EPA prohibits Castanon from “directly or indirectly”

“solicit[ing] or entic[ing], or attempt[ing] to solicit or entice, any clients or

customers of [Symbient] or potential clients or customers of [Symbient] for purposes

of diverting their business or services from [Symbient].”324 Castanon breached this

covenant in several ways.

         First, he sent LinkedIn messages urging Symbient’s former, current, and

potential future customers to utilize Protoshop.325 He described Protoshop as “new

and improved” relative to Symbient and told potential clients that he had “create[d]

something new . . . even better than before.”326

         Castanon also advised on Protoshop projects for current, former, or

prospective Symbient clients:

            • ProteoWise was and remains a Symbient customer.327 Shortly after
              Protoshop opened, Symbient referred ProteoWise to Protoshop due to

324
      EPA § 6.8(c).
325
    See supra notes 151-58; see also Anderson v. USI Advantage Corp., 2020 WL 1933803,
at *3, *5 (N.D. Ga. Apr. 21, 2020) (concluding that corresponding with a former
employer’s customers on LinkedIn violated a non-solicit provision); Robert Half Int’l Inc.
v. Billingham, 315 F. Supp. 3d 419, 425, 432 (D.D.C. 2018) (holding that sending LinkedIn
messages to a former employer’s customers violated a non-solicit provision).
326
      JX 686 at 170-71.
327
      Helm Tr. 123; PTO ¶ II.B.20.

                                           61
                a production backlog.328 Symbient did so believing that Castanon was
                uninvolved in Protoshop.329 Castanon was, however, advising Ceriani
                on Protoshop’s projects for ProteoWise.330

             • DeviceLab is another former Symbient client—one that Castanon
               worked with while at Symbient.331 After Castanon left Symbient, he
               remained in contact with DeviceLab.332 At some point, DeviceLab
               became a customer of Protoshop.333 In February 2022, Castanon
               exchanged text messages with a DeviceLab employee pertaining to
               Protoshop’s work for DeviceLab.334

             • Coagulo is a former (and potential future client) of Symbient.335 After
               Castanon was fired from Symbient on April 21, 2021, Coagulo sought
               to hire him as a consultant so that he could continue working on
               Coagulo’s project.336 Symbient objected to the arrangement because

328
      Ceriani Tr. 505.
329
      Isaacs Dep. 85; Ceriani Dep. 91-92; Helm Tr. 115.
330
   PTO ¶ II.C.57; JX 503 (Castanon advising Ceriani on a “Proteowise OM gate” on April
13, 2022).
331
    JX 103; JX 692; Castanon Tr. 384. Castanon contends that the plaintiffs waived their
claim with respect to DeviceLab. Not so. The plaintiffs’ Complaint was broad enough to
put Castanon on notice of the claim, without identifying specific customers. See LaPoint
v. AmerisourceBergen Corp., 2007 WL 1454744, at *2 (Del. Ch. May 3, 2007) (denying a
motion to exclude evidence of “new claims” or new “damages models” because the
amended complaint alleged a “broad claim” and it “is only to be expected” that case
theories will “evolve[] over the course of discovery”). Moreover, Castanon’s spoliation
prevented the plaintiffs from discovering evidence about DeviceLab earlier. The plaintiffs
only discovered Protoshop’s relationship with DeviceLab after the last-minute production
of Ceriani’s text messages. See supra Section II.A.2.
332
      Castanon Tr. 384-85.
  JX 434 at 2 (Castanon informing DeviceLab that the “[p]arts are on pace to finish by
333

4pm”); JX 435 (Castanon coordinating with DeviceLab for parts to be picked up).
334
   JX 434; JX 435; cf. Castanon Tr. 386-89 (testifying that he was simply handing over
parts to the general manager of DeviceLab).
335
      JX 534.
336
      JX 174; JX 176; JX 180; JX 183; Castanon Tr. 258-59.

                                             62
                 Castanon had yet to formally resign from Symbient.337 Coagulo
                 became increasingly frustrated with Symbient.338 On the day after
                 Castanon formally resigned, he signed a consultation agreement with
                 Coagulo.339 Consultation work on the specific project that Coagulo
                 initially proposed never materialized.340 Coagulo later became a
                 customer of Protoshop341 and worked directly with Castanon.342

             • Sekisui was a prospective Symbient client.343 Sekisui is a now
               Protoshop client. Castanon advised Ceriani on Protoshop’s projects for
               Sekisui.344

Coupled with his LinkedIn messages, Castanon’s work and advice on these projects

was a form of solicitation: enticing customers to use Protoshop over Symbient.345

337
      JX 174; JX 176; JX 180; JX 183.
338
      JX 174; JX 183 at 5.
339
      JX 185.
340
      JX 207.
341
      See, e.g., JX 487.
342
      Id.
343
      See Helm Tr. 132-37; JX 256; JX 734; see also JX 482 (indicating that Symbient
passed on a Sekisui project); JX 731; JX 734; JX 688; Ceriani Tr. 511 (explaining that
Symbient had “turn[ed] [Sekisui’s] business away”).
344
   PTO ¶ II.C.57; JX 492 (Ceriani emailing Castanon because she “[n]eed[ed]” Castanon’s
“expertise” with a Sekisui project); JX 495 (Castanon advising Ceriani on a “Sekisui mold
design question”).
        The plaintiffs also aver that Castanon solicited work from Biocrucible Ltd. and its
sister company satio, Inc. The evidence suggests that Symbient’s loss of these relationships
was caused by its inability to meet deadlines and Ceriani’s departure. Helm Tr. 115-16;
Jurkiewicz Tr. 669-70; cf. Ceriani Tr. 547-50. It could be argued that these problems were
caused by Castanon in the first place, but there is insufficient evidence to make that finding.
345
   Castanon contends that he did not divert Symbient’s business or services to Protoshop
because Symbient and Protoshop did not compete. In his view, Symbient and Protoshop
served different customer needs, with Protoshop functioning as a “supplier” for Symbient.
                                              63
The record is sufficient to support a finding that Castanon violated Section 6.8(c) of

the EPA.346 But to the extent that there are gaps in the record with regard to the

customers discussed above, I infer that Castanon indirectly or directly solicited,

enticed, or attempted to solicit or entice them. Since Ceriani’s texts show Castanon’s

work for DeviceLab, Castanon may have directly texted with it and other Symbient

customers. This adverse inference is a sanction for Castanon’s spoliation.

                4.    Damages

         As an element of their breach of contract claim, the plaintiffs must prove that

Castanon’s actions caused them damages.347 The plaintiffs have shown that they

were harmed by Castanon’s breaches of the restrictive covenants in the EPA.348

Among other things, Castanon created a competing business and solicited

Def.’s Post-trial Br. 25. As discussed above, the trial record shows otherwise. See supra
notes 151, 159-60, 281-83 and accompanying text.
346
   See Lyons Ins. Agency, Inc. v. Wilson, 2018 WL 4677606, at *7 (Del. Ch. Sept. 28,
2018) (concluding that the defendant breached his employment agreement by helping to
service and solicit customers from his former employer’s “book of business”); All Pro
Maids, Inc. v. Layton, 2004 WL 1878784, at *5-6 (Del. Ch. Aug. 9, 2004) (holding that the
defendant breached her employment agreement by soliciting and performing services for
her former employer’s clients).
347
      See Isr. Disc. Bank, 2013 WL 2326875, at *11.
348
    See NetApp, Inc. v. Cinelli, 2023 WL 4925910, at *16 (Del. Ch. Aug. 2, 2023)
(explaining that a plaintiff has the burden to “demonstrate with ‘reasonable certainty’ that
it was damaged by the challenged conduct” (quoting Siga Techs., Inc. v. PharmAthene,
Inc., 132 A.3d 1108, 1111 (Del. 2015))).
                                            64
Symbient’s customers and employees to it. The quantum of the plaintiffs’ damages

is addressed later in this decision.349

         C.      The Plaintiffs’ Remaining Claims

         The plaintiffs’ other claims fail. For the most part, the plaintiffs have simply

recast their contract claims using various legal theories. Their distinct claims were

given short shrift at trial. Judgment is entered for Castanon on each.

                 1.     Implied Covenant of Good Faith and Fair Dealing

         Under Delaware law, the implied covenant of good faith and fair dealing

attaches to every contract.350 “The covenant is designed to protect the spirit of an

agreement when, without violating an express term of the agreement, one side uses

oppressive or underhanded tactics to deny the other side the fruits of the parties’

bargain.”351 It “does not apply when the contract addresses the conduct at issue.”352

         The plaintiffs’ implied covenant claim cannot stand because the challenged

conduct is governed by the EPA. The facts underlying the plaintiffs’ implied

349
      See infra Section II.E.3.
350
      See Dunlap v. State Farm Fire & Cas. Co., 878 A.2d 434, 441-42 (Del. 2005).
351
   BAE Sys. Info. & Elec. Sys. Integration, Inc. v. Lockheed Martin Corp., 2009 WL
264088, at *6 (Del. Ch. Feb. 3, 2009) (cleaned up).
352
   Nationwide Emerging Managers, LLC v. Northpointe Hldgs., LLC, 112 A.3d 878, 896
(Del. 2015); see Kuroda v. SPJS Hldgs., L.L.C., 971 A.2d 872, 888 (Del. Ch. 2009) (“The
implied covenant cannot be invoked to override the express terms of the contract.”).
                                            65
covenant claim are the same implicated in the breach of contract claim.353 The

plaintiffs concede as much, acknowledging that their implied covenant claim is

brought in the alternative.354

            The plaintiffs point to one separate theory based on Castanon’s purported

development of a “new and improved” molding method for Protoshop shortly after

leaving Symbient.355 This vague argument is not, however, tied to any “specific

implied contractual obligation” or gap in the EPA.356 Moreover, there is little

evidence about this purported molding method, including basic facts about what the

method is and when Castanon developed it.

                  2.     Intentional Interference with Contractual Relations and with
                         Prospective Economic Advantage

            The plaintiffs also press claims for intentional interference with contractual

relations and intentional interference with prospective economic advantage. The

353
    See Pls.’ Opening Post-trial Br. 38-39 (arguing that the plaintiffs were deprived of the
fruits of their bargain because of competition, “draining Symbient’s key employees,” and
customer solicitations).
354
      Id.
355
      Id. at 39; see JX 686 at 171.
356
    Kuroda, 971 A.2d at 888 (“[T]o state a claim for breach of the implied covenant, [the
plaintiffs] ‘must allege a specific implied contractual obligation, a breach of that obligation
by the defendant, and resulting damage to the plaintiff.’” (quoting Fitzgerald v. Cantor,
1998 WL 842316, at *1 (Del. Ch. Nov. 10, 1998))). Nor is a gap identified in the Operating
Agreement, which—again—was not mentioned in the Complaint. See supra note 249
(discussing waiver of claims based on the Operating Agreement).
                                              66
parties agree (for different reasons) that Delaware law applies to the claims.357 Both

claims are deficient under Delaware law.

         To prevail on a claim for tortious interference with contractual relations, the

plaintiffs must demonstrate the existence of “(1) a contract, (2) about which

defendant knew, and (3) an intentional act that is a significant factor in causing the

breach of such contract, (4) without justification, (5) which causes injury.”358 The

plaintiffs aver that Castanon interfered with Symbient’s relationships with customers

(including ProteoWise, Coagulo, and Sekisui) by soliciting them to Protoshop.359

But they have not proven the existence of specific contracts with such customers that

357
    Castanon argues that California law applies because California has the most significant
relationship to the claims. But he concedes that there is no material difference between
California and Delaware law. He briefed Counts III and IV under Delaware law. Def.’s
Pre-trial Br. 41-42. The plaintiffs claim Delaware law applies because Counts III and IV
are tort claims rooted in breaches of contracts governed by Delaware law. Pls.’ Pre-trial
Br. 25-26.
358
    Bhole, Inc. v. Shore Invs., Inc., 67 A.3d 444, 453 (Del. 2013) (quoting Irwin & Leighton,
Inc. v. W.M. Anderson Co., 532 A.2d 983, 992 (Del. Ch. 1987)). California law likewise
requires “(1) the existence of a valid contract between the plaintiff and a third party; (2) the
defendant’s knowledge of that contract; (3) the defendant’s intentional acts designed to
induce a breach or disruption of the contractual relationship; (4) actual breach or disruption
of the contractual relationship; and (5) resulting damage.” Ixchel Pharma, LLC v. Biogen,
Inc., 470 P.3d 571, 575 (Cal. 2020).
359
      Pls.’ Opening Post-trial Br. 41.

                                              67
were breached.360 There is no proof of even a single contract between Symbient and

its customers. The claim fails on that basis alone.361

       A claim for tortious interference with prospective economic advantage

requires the plaintiffs to prove “(a) the reasonable probability of a business

opportunity, (b) the intentional interference by the defendant with that opportunity,

(c) proximate causation, and (d) damages.”362 These factors “must be considered in

light of a defendant’s privilege to compete or protect his business interests in a fair

and lawful manner.”363 As such, the plaintiffs “must prove that the defendant’s

conduct was wrongful independent of the interference. Violations of statutory and

360
   See PTO ¶¶ II.B.19-21; Helm Tr. 123 (confirming that ProteoWise remains a Symbient
customer); Jurkiewicz Tr. 693 (confirming that Coagulo is a Symbient customer). No
customers were deposed or testified at trial.
361
   The plaintiffs have also not proven that Castanon’s intentional actions were a significant
factor in causing a breach of any such contracts. Nor have they attempted to prove resulting
damages.
362
   Organovo Hldgs., Inc. v. Dimitrov, 162 A.3d 102, 122 (Del. Ch. 2017) (quoting
DeBonaventura v. Nationwide Mut. Ins. Co., 419 A.2d 942, 947 (Del. Ch. 1980)).
363
    Agilent Techs., Inc. v. Kirkland, 2009 WL 119865, at *5 (Del. Ch. Jan. 20, 2009)
(citation omitted). California law is identical, requiring: “(1) an economic relationship
between the plaintiff and some third party, with the probability of future economic benefit
to the plaintiff; (2) the defendant’s knowledge of the relationship; [and] (3) intentional acts
on the part of the defendant designed to disrupt the relationship.” Golden Eagle Land Inv.,
L.P. v. Rancho Santa Fe Ass’n, 227 Cal. Rptr. 3d 903, 927 (Cal. Ct. App. 2018). As in
Delaware, the plaintiff must show “that the defendant committed an independently
wrongful act.” Ixchel Pharma, LLC v. Biogen, Inc., 470 P.3d 571, 576 (Cal. 2020) (“[A]n
act is independently wrongful if it is unlawful, that is, if it is proscribed by some
constitutional, statutory, regulatory, common law, or other determinable legal standard.”).
                                              68
common law, as well as legal standards of behavior more broadly, satisfy the

independent wrongfulness requirement.”364

         The plaintiffs argue that Symbient had a reasonable probability of future

business opportunities with Symbient’s current, former, and potential customers—

including ProteoWise, Coagulo, Sekisui, DeviceLab, Biocrucible, and satio.365 They

proved that Castanon (directly or indirectly) solicited certain of these customers in

breach of the EPA.366             But they come up short in proving lost business

opportunities.367 No concrete evidence of lost bids or contracts, revenue dissipation,

or lost order volume from the customers was introduced.368 The record also cannot

364
   KT4 P’rs LLC v. Palantir Techs. Inc., 2021 WL 2823567, at *19 (Del. Super. June 24,
2021).
365
      Pls.’ Opening Post-trial Br. 41.
366
      See supra Section II.B.3.
367
    Solicitation of customers (or prospective customers) does not necessarily give rise to
tortious interference with a prospective economic advantage. See, e.g., Wayman Fire Prot.,
Inc. v. Premium Fire & Sec., LLC, 2014 WL 897223, at *11, *26 (Del. Ch. Mar. 5, 2014)
(holding after trial that the plaintiff did not demonstrate tortious interference where it
lacked a reasonable expectation in securing prospective customers, despite showing that
the defendant breached a preliminary injunction preventing it from soliciting the plaintiff’s
prospective customers).
368
    See Agilent Techs., 2009 WL 119865, at *7 (“[T]o plead a reasonable probability of a
business opportunity, [a plaintiff] must identify a specific party who was prepared to enter
into a business relationship but was dissuaded from doing so by the defendant and cannot
rely on generalized allegations of harm.”); see also Triton Const., 2009 WL 1387115, at
*18 (rejecting an argument that the defendant tortiously interfered with job bids where
there was nothing in the record “besides [plaintiff’s] declaration that it had a reasonable
business expectancy to support the conclusion that it did, in fact, have such an expectancy
in the jobs in which it did not bid”).
                                             69
support a finding that future expected work from these customers was “reasonably

probable” absent Castanon’s intentional interference.369

         The plaintiffs perhaps come the closest to meeting their burden with regard to

ProteoWise, which worked with Protoshop when Symbient was at a diminished

capacity.370 Still, proof of Castanon’s intentional interference and proximate cause

is lacking.371 There is no evidence that Castanon sought to connect ProteoWise to

Protoshop. Rather, Symbient affirmatively referred ProteoWise to Protoshop, and

ProteoWise then reached out to Ceriani.372 Further, the plaintiffs did not prove that

Castanon was the proximate cause of their inability to timely complete ProteoWise’s

requests.373

369
    Agilent Techs., 2009 WL 119865, at *7 (“To be reasonably probable, a business
opportunity must be ‘something more than a mere hope or the innate optimism of the
salesman’ or a ‘mere perception of a prospective business relationship.’” (quoting Wolk v.
Teledyne Indus., Inc., 475 F. Supp. 2d 491, 512 (E.D. Pa. 2007); Lipson v. Anesthesia
Servs., P.A., 790 A.2d 1261 (Del. Super. 2001))); see also Wayman Fire Prot., 2014 WL
897223, at *11 (“[W]hile [plaintiff] has shown that its chances of securing the upgrade
contract were something greater than zero, it has not met its burden of demonstrating that
those chances were high enough such that it reasonably could expect that [the prospective
customer] would select its bid.”); Triton Const., 2009 WL 1387115, at *18 (“Even if this
Court assumes, as [plaintiff] argues, that it had no opportunity to bid on 131 of the 195 jobs
because [defendant] diverted them, [plaintiff] has not proved that it had a reasonable
probability of obtaining any of those jobs.”).
370
      JX 565; JX 347.
371
      In addition, no specific damages have been proven for this purported loss.
372
      JX 347.
373
   Arguments regarding Coagulo and Sekisui are even more strained. The record shows
that Coagulo was dissatisfied with Castanon’s exit and sought to retain him as a consultant.
See JX 185; see also JX 180; Jurkiewicz Tr. 693. As to Sekisui, Symbient declined work
                                              70
                 3.     Breach of Fiduciary Duty

         Finally, the plaintiffs aver that Castanon breached his fiduciary obligations by

misusing confidential information given to him as a Board observer.374 This claim

is baseless.

         Castanon did not owe common law fiduciary duties to Symbient after his

officer-level position ended.375 Nor did he not owe contractual obligations akin to

fiduciary duties by virtue of the EPA. Perhaps recognizing that these facts, the

plaintiffs now focus on Castanon’s obligation in the Operating Agreement to “hold

in confidence and trust and to act in a fiduciary manner with respect to all

information” given to him as a Board observer.376 Once again, the plaintiffs did not

fairly or timely raise the Operating Agreement as a source of liability.377 Even if

they had, there is no evidence establishing that Castanon breached this provision of

the Operating Agreement.

from the company in August 2021. See Helm Tr. 132, 134-35; see also JX 482. There is
no evidence that Castanon was involved with Symbient’s decision to decline Sekisui’s
work.
374
      Pls.’ Opening Post-trial Br. 43; Pls.’ Post-trial Reply Br. 29-30.
375
   See In re Walt Disney Co. Deriv. Litig., 906 A.2d 27, 51 (Del. 2006) (explaining that a
former director “could not breach a duty he no longer had”); see also Balotti & Finkelstein,
The Delaware Law of Corporations and Business Organizations, §4.8[B] n.124 (3d ed.
2008) (“[B]oard observers are not subject to the same fiduciary duties as directors.”).
376
      Operating Agreement § 3.12(b).
377
      See infra note 252.

                                                71
         The plaintiffs introduced evidence that Castanon attended an August 2021

Board meeting where he received confidential materials.378 But there is nothing in

the record showing that he misused the information. The argument that Castanon

improperly used Symbient confidential information (i.e., images of devices) to

market Protoshop is likewise unavailing. Although the images are obviously of

products Symbient created, there is no evidence that Castanon was the one who

selected or posted the images on Protoshop’s website. The plaintiffs’ speculation is

insufficient proof.379

         D.     Unclean Hands

         Castanon contends that the doctrine of unclean hands precludes the plaintiffs

from obtaining relief. Specifically, he argues that he was wrongfully terminated and

that the plaintiffs concealed information from him during negotiations over the Unit

Repurchase Agreement. To the extent the doctrine is an available defense to the

plaintiffs’ legal claims, its predicate requirements are unmet.

         The doctrine of unclean hands provides that a “litigant who engages in

reprehensible conduct in relation to the matter in controversy . . . forfeits [their] right

378
      JX 255; see also Finley Tr. 41-43.
379
   E.g., Pls.’ Post-trial Reply Br. 29-30 (“The Court can . . . infer that Castanon
impermissibly retained these materials, planning to use them for his own competing
purposes.”).
                                            72
to have the court hear [their] claim.”380 “In order for the doctrine to apply in the first

place, the improper conduct must relate directly to the underlying litigation.”381 The

relation must be “‘immediate and necessary’ [] to the claims for which the plaintiff

seeks relief.”382 The conduct must also be “so offensive to the integrity of the court

that [the] claims should be denied, regardless of their merit.”383 Nevertheless, the

court “has broad discretion in determining whether to apply the doctrine of unclean

hands.”384

           Castanon was not wrongfully terminated. He was terminated without cause,

as his employment agreement with Symbient permitted.385 But insofar as it is

attributable to the plaintiffs, the Board’s conduct while negotiating Castanon’s Unit

Repurchase Agreement is substandard. The Board tried to conceal information that

might have made Castanon less likely to accept a lower offer for his units.

380
   Nakahara v. NS 1991 Am. Tr., 739 A.2d 770, 791-92 (Del. Ch. 1998) (quoting In re
Enstar Corp., 593 A.2d 543, 553 (Del. Ch. 1991)).
381
      Nakahara v. NS 1991 Am. Tr., 718 A.2d 518, 523 (Del. Ch. 1998).
382
   Macrophage Therapeutics, Inc. v. Goldberg, 2021 WL 2582967, at *16 (Del. Ch. June
23, 2021) (citation omitted).
  Portnoy v. Cryo-Cell Int’l, Inc., 940 A.2d 43, 81 (Del. Ch. 2008) (quoting Gallagher v.
383

Holcomb & Salter, 1991 WL 158969, at *4 (Del. Ch. Aug. 16, 1991)).
384
   RBC Cap. Mkts., LLC v. Jervis, 129 A.3d 816, 876 (Del. 2015) (quoting SmithKline
Beecham Pharms. Co. v. Merck & Co., Inc., 766 A.2d 442, 448 (Del. 2000)) (citation
omitted).
385
      JX 64 at 3.

                                            73
Regardless, this behavior is neither directly related to the underlying litigation nor

“so offensive” as to invoke unclean hands.386

       Even if it were, Castanon’s attempt to invoke equity unravels in light of his

own misconduct. “This court has consistently refused to apply the doctrine of

unclean hands to bar an otherwise valid claim of relief where the doctrine would

work an inequitable result.”387 I decline to apply the doctrine.

       E.     The Remedy

       The plaintiffs have proven that Castanon breached the non-compete and non-

solicit covenants in the EPA. They seek several different remedies for these harms.

First, they ask for disgorgement of at least $7.4 million based on the sale of Symbient

to Gener8 or, alternatively, compensatory damages of approximately $2.3 million.

Second, they request injunctive relief requiring Castanon to abide by the terms of

the EPA’s restrictive covenants. Finally, they seek payment of their attorneys’ fees

and costs under a prevailing party provision in the EPA.

386
    See Am. Healthcare Admin. Servs., Inc. v. Aizen, 285 A.3d 461, 494 (Del. Ch. 2022)
(explaining that the doctrine of unclean hands “does not extend to any misconduct,
however gross, that is unconnected with the matter in litigation, and with which the
opposite party has no concern” (quoting 27 Am. Jur. Equity § 25)); see also Portnoy, 940
A.2d at 81 (holding that the plaintiff’s aiding in violations of a confidentiality agreement
“while being far from pristine, [fell] well short of disqualifying him from seeking relief”
for the defendant’s breach of fiduciary duty).
387
     Portnoy, 940 A.2d at 81 (“[U]nclean hands is a doctrine designed to protect the integrity
of a court of equity, not a weapon to be wielded by parties seeking to excuse their own
inequitable behavior by pointing out a trifling instance of impropriety by their counterpart
. . . .”).
                                             74
                  1.    “Disgorgement”

            The plaintiffs argue that their damages are “show[n] by the valuation of

Symbient performed by KPMG for the $14.4 million acquisition” by Gener8.388

Their theory is that Castanon’s breach of his restrictive covenants “destroyed the

goodwill and growth” that Gener8 paid to acquire.389 The plaintiffs describe this

approach as restitution in the form of “disgorgement” for part of the acquisition

price.390 Regardless of how they style it, the plaintiffs’ request is deeply flawed.

            Fundamentally, this remedy is untethered from the harm caused by Castanon’s

breaches of his covenants not to compete or solicit. “It is a basic principle of contract

law that [the] remedy for a breach should seek to give the nonbreaching [] party the

benefit of its bargain by putting that party in the position it would have been but for

388
      Pls.’ Opening Post-trial Br. 45.
389
      Id.
390
    See id. at 45-46; see also Post-trial Argument Tr. (Dkt. 164) 75-76. Generally,
restitution focuses on the harm to the plaintiff as it pertains to a breach of the parties’
agreement. Performance-based damages under a theory of restitution can be measured by
“the market value of the plaintiff’s uncompensated contractual performance, not exceeding
the price of such performance as determined by reference to the parties’ agreement.”
Restatement (Third) of Restitution and Unjust Enrichment § 38(2)(b) (Am. L. Inst. 2011);
see also Norton v. Poplos, 443 A.2d 1, 4-5 (Del. 1982) (discussing restitution in the context
of rescission). Disgorgement focuses on the defendant’s gain from illegal conduct. It is
“the act of giving up something (such as profits illegally obtained) on demand or by legal
compulsion.” TIAA-CREF Individual & Instit. Servs., LLC v. Ill. Nat’l Ins. Co., 2016 WL
6534271, at *10 (Del. Super. Oct. 20, 2016) (quoting Disgorgement, Black’s Law
Dictionary (10th ed. 2014)); see also Avande, Inc. v. Evans, 2019 WL 3800168, at *18
(Del. Ch. Aug. 13, 2019) (“The purpose of disgorgement is to deter ‘acts of conscious
wrongdoing and breaches of a fiduciary’s duty of loyalty . . . by requiring the wrongdoer
to disgorge any profit made as a result of such wrongful conduct.’”).
                                             75
the breach.”391 The plaintiffs do not argue that Castanon was unjustly enriched

through the sale of Symbient and the transaction is not the underlying wrong at issue

in this case.392 To award damages on this basis, particularly while the plaintiffs

retain the assets and upside, would result in a windfall exceeding the relevant

expectations.393

         Even if such a remedy were hypothetically available (it is not), I would reject

the plaintiffs’ request. The plaintiffs seek to recover approximately $7.4 million:

$9.6 million “for the value of goodwill” prorated by the time Castanon complied

with his restrictive covenants (14 of 60 months, or 23.3%).394 They base their

calculation on a purchase price allocation KPMG LLP performed before Gener8’s

acquisition of Symbient (the “PPA”).395              The PPA allocated $9,657,000 to

391
      Genencor Int’l, Inc. v. Novo Nordisk A/S, 766 A.2d 8, 11 (Del. 2000).
392
   There is no evidence that Castanon gained profits from his breaches of the EPA. The
record does not suggest that he draws a salary from Protoshop or holds any equity interests.
Isaacs Tr. 198-99; Castanon Tr. 263; Ceriani Tr. 495.
393
   E.I. DuPont de Nemours & Co. v. Pressman, 679 A.2d 436, 445 (Del. 1996) (observing
that “damages for breach of contract have been limited to the non-breaching parties’
expectation interest”); see also Topps Co., Inc. v. Cadbury Stani S.A.I.C., 380 F. Supp. 2d
250, 269 (S.D.N.Y. 2005) (explaining that disgorgement “is not an appropriate remedy for
a breach of contract” because it “looks to the defendant’s ill-gotten gains, rather than to the
plaintiffs losses”).
394
      See Pls.’ Opening Post-trial Br. 45-46.
395
    JX 65; see Finley Tr. 14-15; d’Almeida Tr. 748-49. A purchase price allocation assigns
the purchase price to the various assets and liabilities acquired. For example, the PPA
allocated a portion of the purchase price to items such as “Cash,” “Accounts Receivable,”
and “Inventory.” JX 65.
                                                76
“Goodwill.”396 But, as the defendant’s expert Jaime d’Almeida explained at trial,

the PPA’s goodwill estimate is “an accounting calculation” that “has nothing to do

with economic value.”397 It is simply “the difference between the purchase price and

all th[e] assets [KPMG] identified.”398

         I need not consider this remedy further. It is unfitting and unfounded.

                2.    Lost Profits

         I next consider the plaintiffs’ request for expectation damages in the form of

lost profits. Under Delaware law, the standard remedy for breach of contract “is

based upon the reasonable expectations of the parties ex ante.”399 One measure of

expectation damages is lost profits resulting from the breach. 400

396
      JX 65.
397
    d’Almeida Tr. 756; see id. at 760 (“So this [goodwill] isn’t valued directly. It’s a
residual after subtracting all the other assets that have been – either been identified.”).
398
      d’Almeida Tr. 748-49.
399
      Duncan v. Theratx, Inc., 775 A.2d 1019, 1022 (Del. 2001).
400
    See PharmAthene, Inc. v. SIGA Techs., Inc., 2014 WL 3974167, at *7 (Del. Ch. Aug.
8, 2014) (“One measure of expectation damages is a party’s lost profits.”); Base Optics
Inc. v. Liu, 2015 WL 3491495, at *16 n.122 (Del. Ch. May 29, 2015) (“[T]his Court has
found that, in the context of a breach of a non-compete agreement, lost profits from
business within the scope of the parties’ non-compete are direct, not consequential
damages.”); Symbiont.io, Inc. v. Ipreo Hldgs., LLC, 2021 WL 3575709, at *57 (Del. Ch.
Aug. 13, 2021) (noting that “a standard measure of damages that courts deploy in cases
involving breaches of restrictive covenants [is] the profits that the venture could have
obtained but for the prohibited conduct”); Del. Express Shuttle, Inc. v. Older, 2002 WL
31458243, at *15 (Del. Ch. Oct. 23, 2002) (awarding the plaintiffs damages equal to “any
profits earned by the Defendants that may be attributed to the breach of the Non-
Competition Agreement”); see also NetApp, 2023 WL 4925910, at *19 (discussing the
award of lost profits as a “forward-looking measure” of expectation damages designed “to
                                             77
         The plaintiffs seek damages equal to profits lost after Castanon solicited or

encouraged Isaacs, Ceriani, and others to join Protoshop. They rely on the testimony

of Dr. Brett Margolin, who estimated that Symbient suffered between $1,529,146 to

$2,333,067 in lost profits because of Castanon’s actions.401 Margolin assessed two

different components of lost profit damages: “Fee Damages” and “Customer

Retention Damages.”402 In rebuttal, Castanon proffered the testimony of d’Almeida,

who critiqued Margolin’s analysis.403

         Fee Damages, as described by Margolin, are the result of Symbient’s “lost

opportunity to deploy” the “services” of “Solicited Employees” and “earn profits on

the associated fees and materials revenues.”404 Margolin estimated lost revenue,

added profits on expected materials and overhead billing, and subtracted avoided

restore the injured party to the economically equivalent position it would have held absent
the injury”); Leaf Invenergy Co. v. Invenergy Renewables LLC, 210 A.3d 688, 695 (Del.
2019) (“When determining expectation damages, courts determine an amount that will give
the injured party ‘the benefit of its bargain by putting that party in the position it would
have been but for the breach.’ The primary element of expectation damages is [] ‘the value
that the performance would have had to the injured party,’ or the ‘loss in value’ caused by
the deficient performance compared to what had been expected.”).
401
      JX 662 (“Margolin Report”).
402
      Id. at 6. The “Solicited Employees” are Ceriani, Isaacs, Lupercio, Ancheta, and Taylor.
Id.
403
      JX 667 (“d’Almeida Report”).
404
      Margolin Report 6.

                                              78
costs including payroll expenses and employee benefits.405 His calculation of

avoided costs also adjusted for time spent on managerial duties.406

          Margolin’s Customer Retention Damages analysis assumes that Symbient

benefits from repeat customer contracting.407 Margolin opined that the departure of

the solicited employees reduced Symbient’s repeat customer pool. To quantify this

effect, he applied the attrition rate to forecast the reduction in repeat customer

contracting in the period after the Fee Damages accrued.408

          Margolin’s model also assumes that Symbient was “supply constrained”

during the Fee Damages period.409 “Supply constrained” means that the demand for

Symbient’s services exceeded its available professional hours by at least as much as

the billable hours lost with the solicited employees. In other words, had Castanon

not solicited certain employees, Symbient could have entered client contracts that

would maintain the employees’ billable hours. Margolin also acknowledged that his

405
      Id. at 7-8.
406
    Id. at 8. In other words, these employees generated value for—and were compensated
by—Symbient for both their billing and managerial activities. This adjustment accounted
for the latter.
407
      Id. at 6.
408
    Suppose, for example, Fee Damages lasted until 2022, at which time they were $1,000.
In that case, Customer Retention Damages would be $700 in 2023, $490 in 2024, and so
on. Fee Damages would be $0 from 2023 and thereafter.
409
      Margolin Report 9.

                                          79
model presumes the solicited employees would remain with Symbient throughout

the relevant period.410

          Using this approach, Margolin estimated damages of $1,529,146 (assuming

that Symbient was supply constrained through 2022) and $2,333,067 (assuming that

Symbient was supply constrained through 2024).411

          I reject Margolin’s analysis for several reasons.412

          First, Margolin’s Fee Damages are speculative. The keystone of his analysis

is that Symbient would have had more business but for the loss of the solicited

employees.413 Margolin did not, however, identify a single job that was rejected due

to insufficient staff.

          Moreover, Margolin does not consider mitigation efforts. The calculation of

lost profit damages should be offset by a plaintiff’s actions to overcome harm caused

by the defendant.414 Margolin accepted that Symbient could not have replaced the

410
      Id. at 11.
411
   Margolin discounted future year Fee Damages and Customer Retention Damages to
present value using a 21% cost of capital. Margolin Report 11.
412
   I also question whether such damages are supported by the terms of the EPA. See EPA
§ 9.2 (providing that Castanon shall indemnify the plaintiffs for “Losses” suffered by the
plaintiffs arising out of a “breach of any covenant or agreement” in the EPA); id. § 10.1(a)
(defining “Losses” as damages “excluding lost profits”). Neither party briefed this matter.
413
      See d’Almeida Tr. 790.
414
   See d’Almeida Report 42 (quoting AICPA Practice Aid: 06-4 Calculating Lost Profits
45).
                                             80
solicited employees. But the evidence shows that Symbient managed to replace each

of the solicited employees with internal promotions or new hires.415 With the

solicited employees all (or mostly) replaced, any lost profits would be reduced.416

          Margolin’s calculation of Customer Retention Damages is equally

conclusory.417         Margolin provided no backup for his conclusion that each

employee’s departure “reduce[d] the pool of repeat customers on which future fee

volumes depend.”418 There is no reliable evidence suggesting that the departures

affected Symbient’s ability to retain customers. In fact, only Ceriani was customer-

facing.419

          Ultimately, Margolin sets forth an unreliable measure of damages. I decline

to adopt it.

                 3.     Damages For Out-of-Pocket Losses

          d’Almeida suggests that, to the extent the court is inclined to award damages,

a “more appropriate and supported calculation” would be based on the lost value of

Symbient’s workforce.420 I agree. The plaintiffs proved that the departure of the

415
   See Jurkiewicz Tr. 697-98; d’Almeida Report 14-16; JX 373; see also d’Almeida Tr.
791-96.
416
      See d’Almeida Tr. 789, 791-95.
417
      d’Almeida Report 43-44.
418
      Margolin Report 6.
419
      d’Almeida Report 43-44.
420
      See id. at 48.

                                            81
solicited employees harmed Symbient.421 Hiring and training new employees is not

costless and internal promotions may divert corporate resources.422 Awarding

damages measured by these one-time losses will (at least partly) compensate

Symbient for Castanon’s solicitation of its employees.423

         As part of Gener8’s diligence on the Symbient acquisition, Gener8 engaged

KPMG LLP to perform a valuation of Symbient’s assets (the “KPMG Report”).424

Neither party disputes the credibility of the KPMG Report.425 Among other things,

the KPMG Report valued Symbient’s “Assembled Workforce” by estimating the

“[a]voided recruiting costs” and “[a]voided training costs and loss of productivity”

of each employee.426 Hiring and training new employees would drain resources, and

the value of Symbient’s workforce was the sum total of those avoided costs. This is

a more responsible measure of compensatory damages than that advanced by

Margolin.427

421
      See Helms Tr. 104-06, 155; Jurkiewicz Tr. 698, 703.
422
      JX 152 at 23.
423
   See NetApp, 2023 WL 4925910, at *17 (describing “out-of-pocket” compensatory
damages as “designed to restore the plaintiff to his financial position” before the harm
occurred and appropriate to resolve one-time costs).
424
      JX 152.
425
      See Margolin Tr. 616-17; d’Almeida Tr. 761-62.
426
      JX 152 at 23.
427
      See d’Almeida Report 11; d’Almeida Tr. 787-90.

                                             82
         The KPMG Report estimated the “Assembly Costs” for Symbient’s workforce

by employee category. The relevant categories and associated assembly costs as

applied to the five solicited employees yields total costs of $104,356.00:428

              Solicited Employee Employee Category Assembly Cost
                     Ceriani             Engineer     $32,244.00
                    Ancheta              Machinist    $22,353.00
                     Isaacs          Shop Supervisor  $22,189.00
                    Lupercio       Molding Supervisor $20,247.00
                     Taylor          Office Manager    $7,323.00
                             Total Costs              $104,356.00

          Whether Symbient incurred these precise costs in replacing the employees it

lost to Protoshop is uncertain. Delaware law does not, however, “require certainty

in the award of damages where a wrong has been proven and injury established.”429

The amounts described above provide a non-speculative, “responsible estimate.”430

Accordingly, the plaintiffs are awarded $104,356.00 in damages to compensate them

for Castanon’s breach of Section 6.8(b) of the EPA.

428
      JX 152 at 53.
429
    Del. Express, 2002 WL 31458243, at *15 (“Responsible estimates that lack
mathematical certainty are permissible so long as the court has a basis to make a
responsible estimate of damages.”); see also Siga Techs., 132 A.3d at 1111 (“The amount
of damages can be an estimate.”).
430
      Beard Rsch. Inc. v. Kates, 8 A.3d 573, 613 (Del. Ch. 2010).

                                             83
                    4.   Injunctive Relief

         In addition to damages, the plaintiffs seek injunctive relief specifically

enforcing the EPA.431 To prove their entitlement to injunctive relief, the plaintiffs

must demonstrate (1) actual success on the merits, (2) irreparable harm, and (3) that

the balance of the equities weighs in favor of issuing an injunction. 432 “Further, to

gain specific performance of a covenant not to compete, these elements must be

established by clear and convincing evidence.”433

         The plaintiffs established each of these elements. Castanon breached Sections

6.8(a), 6.8(b), and 6.8(c) of the EPA. “[O]ur law has consistently found a threat of

irreparable injury in circumstances when a covenant not to compete is breached.”434

The equities favor issuing an injunction—especially given the unavailability of

monetary damages to remedy Castanon’s violation of his non-compete. Castanon is

enjoined from: (1) soliciting the plaintiffs’ employees or customers; and (2) having

any involvement with Protoshop or any other Restricted Business, as prohibited by

431
    The plaintiffs also requested specific performance of the Operating Agreement but
waived any claim based on that agreement. Regardless, the Operating Agreement cannot
be specifically enforced against Castanon since he is no longer a member of G8 Holdings.
432
   Concord Steel, Inc. v. Wilm. Steel Processing Co., 2009 WL 3161643, at *14 (Del. Ch.
Sept. 30, 2009), aff’d, 7 A.3d 486 (Del. 2010).
433
      Hough Assocs., 2007 WL 148751, at *14.
434
      Id. at *18.

                                             84
the restrictive covenants in the EPA.435 This injunction will remain in place through

the end of the EPA’s “Restricted Period,” which ends on February 20, 2025.

                5.    Attorneys’ Fees and Costs

         Finally, the plaintiffs seek an award of their attorneys’ fees and costs.

“Although the so-called American Rule generally requires each party to bear its own

attorney’s fees, the parties may, of course, by contract shift that burden.”436 Section

10.14 of the EPA entitles the “prevailing party” to recover “its actual out-of-pocket

costs and expenses, including without limitation reasonable attorneys’ fees incurred

in connection with” “an action to enforce [that party’s] rights under [the EPA].”437

“In determining status as the prevailing party,” Delaware looks to “predominance in

the litigation.”438

         The predominant issue in this case was whether Castanon breached non-

compete and non-solicit covenants in the EPA. The other claims stemmed from the

same factual predicate and involved issues overlapping with Castanon’s contractual

breaches. The plaintiffs are the prevailing party on the breach of contract claim

435
      EPA § 6.8(a).
436
      Del. Express, 2002 WL 31458243, at *23.
437
      EPA § 10.14.
438
      Comrie v. Enterasys Networks, Inc., 2004 WL 936505, at *2 (Del. Ch. Apr. 27, 2004).

                                            85
concerning Sections 6.8 (a), (b), and (c) of the EPA.439 Thus, the plaintiffs are

contractually entitled to their “reasonable attorneys’ fees.”440

         The plaintiffs maintain that I should award the full amount of their fees

without limitation. At present, the plaintiffs have not attempted to quantify the fees

and expenses incurred in this litigation.         Without that information, I cannot

determine if the fees sought are reasonable—a term that the parties contracted for in

the EPA. Additional submissions are necessary to determine whether the fees and

expenses sought are reasonable.

III.     CONCLUSION

         Castanon breached Sections 6.8(a), 6.8(b), and 6.8(c) of the EPA. Judgment

on Count I is entered for the plaintiffs. The plaintiffs are awarded $104,356.00 in

damages, plus pre-judgment interest at the legal rate.441 The plaintiffs are also

awarded their reasonable attorneys’ fees and expenses. Additionally, an injunction

439
   See id. (deeming the plaintiffs the “prevailing party,” despite receiving 28% of the
remedy sought, because “[t]he main issue in th[e] case—and the issue upon which it can
be determined the plaintiffs predominated in litigation—[wa]s the interpretation of the
Agreement”); 2009 Caiola Fam. Tr. v. PWA, LLC, 2015 WL 6007596, at *33 (Del. Ch.
Oct. 14, 2015) (explaining that “[t]o achieve predominance, a litigant should prevail on the
case’s ‘chief issue’” (quoting W. Willow-Bay Ct., LLC v. Robino-Bay Ct. Plaza, LLC, 2009
WL 458779, at *9 (Del. Ch. Feb. 23, 2009))).
440
      EPA § 10.14.
441
   See Citadel Holding Corp. v. Roven, 603 A.2d 818, 826 (Del. 1992) (“In Delaware,
prejudgment interest is awarded as a matter of right.”) (citing Moskowitz v. Mayor &
Council of Wilm., 391 A.2d 209 (Del. 1978)).
                                            86
is issued requiring Castanon to abide by Sections 6.8(a), 6.8(b), and 6.8(c) of the

EPA until February 20, 2025.

      The plaintiffs did not prevail on Counts II through V. Judgment is entered for

Castanon on those claims.

      Castanon also committed contempt and spoliation. As remedies, I have drawn

limited adverse inferences in favor of the plaintiffs and award the plaintiffs their

reasonable attorneys’ fees and expenses incurred in bringing the motion for

sanctions.

       The parties shall confer on an order to implement this decision and file it

within 30 days. The parties shall also confer on a schedule for submissions to resolve

the reasonableness of the plaintiffs’ fees and expenses.

                                         87