Court Opinion

ID: 4387384
Source: CourtListenerOpinion
Date Created: 2019-04-15 16:03:38.85537+00
Date Added: 2024-06-11T14:50:39.978618
License: Public Domain

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE

AVVE, INC.,
Plaintiff,

V. C.A. No. Nl8C-lO-Oll RRC

UPSTACK TECHNOLOGIES, INC.,
f/k/a ALT TAB, INC.,

Defendant.

Submitted: March 4, 2019
Decided: April 12, 2019

On Defendant’s Motion to Dismiss
Count 3 of Plaintiff’ s Amended Complaint.
GRANTED.

MEMORANDUM OPINION

Tiffany M. Shrenk, Esquire, and Andrew R. Silverman, Esquire, MacElree Harvey,
LTD, Centreville, Delaware, Attorneys for Plaintiff Avve, Inc.

Barry M. Klayman, Esquire, and Matthew Bleich, Esquire, Cozen O’Connor P.C.,
Wilmington, Delaware, Attorneys for Defendant Upstack Technologies, Inc.

COOCH, R.J.
I. INTRODUCTION

Upstack Technologies, Inc. (“Defendant”) has moved to dismiss Count 3 of
Avve, Inc.’s (“Plaintiff’) Amended Complaint, pursuant Superior Court Civil Rule
12(b)(6). Plaintiff’s complaint arises out of an alleged breach of a commercial
services contract between Plaintiff and Defendant. Plaintiff alleges that Defendant
breached the contract in a number of Ways and committed fraud. The breach of
contract claims, Counts l and 2 of the Amended Complaint, are unchallenged by

Defendant in the instant motion to dismiss, and a Trial Scheduling Order has been
issued for those counts.

Count 3 claims that Defendant committed fraud under Delaware law by
allegedly misrepresenting certain aspects of Defendant’s business prior to the parties
entering into the service contract. Defendant’s primary argument is that Plaintiff has
failed to satisfy the heightened pleading requirements for fraud claims under
Superior Court Civil Rule 9(b). Defendant argues that Plaintiff has not plead fraud
with sufficient particularity and specificity as required by Rule 9(b). Plaintiff
counters that the complaint sufficiently apprises Defendant of the nature of the claim
and thus satisfies Rule 9(b).

The Court concludes that Count 3 of Plaintiff’s Amended Complaint does not
meet the heightened pleading standards of Rule 9(b). Accordingly, Defendant’s
Motion to Dismiss Count 3 of the Amended Complaint is granted.

II. FACTS AND PROCEDURAL HISTORY

Avve, Inc. provides digital layaway services for e-commerce retailers and
their customers. Ms. Patricia Hauseman served as Avve’s Chief Executive Officer.
Upstack Technologies, Inc. provides website-building and maintenance services by
providing software developers for its clients. Upstack advised potential clients that
it selects the developer from a network of engineers, and all undergo a rigorous
hiring process to ensure that each engineer “possess[es] top tier communication,
personality, and tech slId. at 118.

3 Id. at 3 119.

e-commerce environment for its customers, and that Avve envisioned an intuitive
and effortless process for customers to access applications The two CEOS also met
at the end of January 2017. At this meeting Hauseman provided Mlynsky with
specific webpages the website should have, and the specific steps and actions that
the developed products would need to accomplish in order to satisfy Avve’s business
needs.

On February 27, 2017, the parties entered into a written agreement for the
development of a website and an application for Avve. The contract designated an
individual, “Dragos S.,” to develop the website and application Unbeknownst to
Avve, Dragos apparently suffered from a serious medical condition which hampered
his ability to consistently work on the Avve project. Avve discovered Dragos’
medical issue about six months after the parties entered into the contract. Avve also
claims that Dragos was not fluent in English, as allegedly evidenced by numerous
alleged spelling and grammatical errors.

By October 2017 development progressed at a crawl. Dragos had not provided
a working product in over six months and Avve was forced, it claims, to secure an
independent senior developer to take over the work. Thereafter, Avve says that it
was made aware of a slew of problems with Dragos’ work. Avve claims that Dragos’
performance was substandard because, inter alia, he used outdated programming
techniques, failed to prevent overwriting of user data, used excess code which
unnecessarily lengthened development time, and failed to properly document code
for future developers4 By November 2017, nine months after the parties entered into
the contract, Avve asserts that it did not have a working website or application Avve
terminated the contract in November 2017.

Thereafter, Avve filed suit claiming Defendant breached the service contract,
breached the covenant of good faith and fair dealing, and committed common law
fraud.5 Specifically, Count 3 alleges that Defendant committed fraud throughout the
course of the pre-contract discussions from August 2016 to January 2017. Mlynsky
allegedly committed fraud by making false promises and assurances regarding the
quality of Upstack’s services. In the complaint, Avve alleges that:

 

4 S@e id. at 8_9 1129.

5 In Plaintiff’ s original complaint, Count 3 claimed Defendant violated New York State General
Business Law § 349 for misleading and deceptive business practices. Defendant filed a motion to
dismiss this claim. Plaintiff apparently agreed that Delaware law in fact controlled, and the parties
agreed to allow Plaintiff time to amend the complaint Plaintiff filed an amended complaint which
replaced the New York law claim with a claim of common law fraud under Delaware law as the

new Count 3.

57. From August 2016 through February 2017, in its course of dealing with Plaintiff
(as described above in paragraphs 5 through 37), Defendant [through Mlynsky]
made the following misrepresentations of fact to Plaintiff:

a. that Defendant engages only developers within the top 1% in their domain.
Upstack would designate a senior level developer to develop Avve’s website
and application;

b. that Defendant only hires senior engineers;

c. that Defendant pre-vets their developers to ensure that they have the necessary
skillset to perform the services for Defendant’s customers;

d. that Defendant assigns only top-tier developers to perform services for
Defendant’s customers;

e. that the developer designated for Plaintiff’s project would be fluent in English;

f. that [Mlynsky] will be involved in the development of products bargained-for by
Plaintiff;

g. that Plaintiff would be matched with a senior Upstack expert in their domain;

and/or
h. that the development of Plaintiff s website and application would be completed

within approximately four (4) months.6

Avve asserts that Mlynsky “knew that the aforementioned misrepresentations
were false, or made the representation[s] with a reckless indifference to the truth.”7
Based on Dragos’ substandard work, Defendant allegedly “knew or should have
known” that Dragos lacked the skills to complete the project.

Defendant has moved to dismiss Count 3 of the Amended Complaint under
Rule 12(b)(6), alleging that the allegations within Count 3 do not meet the
heightened pleading standards of Rule 9(b). Briefing on Defendant’s motion started
off in an orderly manner, with Plaintiff filing its Response on February 8, 2019, and
Defendant filing its Reply Brief on February 22. However, after the parties had
submitted their briefs, and after the close of business March 1, 2019_the Friday
before oral argument on March 4_~Plaintiff filed an affidavit from Hauseman
purportedly to supplement Plaintiff’s Answering Brief to Defendant’s Motion to
Dismiss. The affidavit sought to explain in further detail the misrepresentations of
fact that Plaintiff alleged that Defendant had stated. No permission was sought from
or given by the Court to file the affidavit

 

6 Pl.’s Am. Compl. at 15 1157 (emphasis added).
7 1a at 16 1158.

III. THE PARTIES’ CONTENTIONS

A. Defendant’s Contentions

First, Defendant argues that Count 3 of the Amended Complaint does not
satisfy the Rule 9(b) heightened pleading requirements Rule 9(b) requires that
allegations of fraud to “be stated with particularity.”8 Defendant contends that
Plaintiff has not met the Rule 9(b) burden because Plaintiff failed to state the time,
place, or manner of the communications with sufficient particularity Defendant
argues that Plaintiff has only asserted a broad six-month time frame in which the
misrepresentations occurred. Defendant contends that the complaint does not set
forth exactly when within the six-month time frame each misrepresentation is
alleged to have occurred, does not set forth how the misrepresentations were
communicated, and does not sufficiently explain to whom the misrepresentations
were stated.

Furthermore, Defendant argues that Plaintiff’s use of the phrase “and/or,” at
the end of subparagraph 57(g), to join the six examples of alleged fraud, makes it
unclear and otherwise ambiguous whether all or some of the alleged
misrepresentations are claimed to have occurred.9 Lastly, as it relates to particularity,
Defendant objects to the Court considering Plaintiffs affidavit, on the grounds that
was untimely filed. Defendant further contends that even if the Court were to
consider the affidavit, it would not correct the deficiencies in Count 3 that Defendant
has alleged. With all such ambiguity, with or without the affidavit, Defendant argues
that Plaintiff’s fraud claim must be dismissed.

Defendant also argues that Plaintiff s fraud claim impermissibly seeks the
same damages allegedly caused by the breach of contract. Defendant asserts that
Plaintiff cannot rehash the breach of contract claim and seek “materially identical
damages” in the fraud claim.10 Defendant contends that Plaintiff has merely “copy-

 

8 super. ct. civ. R. 9(b).

9 Def.’s Reply Br. at 1, Avve, lnc. v. Upstack Technologi`es, Inc., NlSC-lO-Oll RRC, Trans. No.
62992905 (Feb. 22, 2019). Defendant’s “and/or” argument is absent from its Opening Brief, and
first appears in its Reply Brief. The Court notes that the “and/or” argument could have been raised
in Defendant’s Opening Brief, although the arguments made in Plaintiff’s Answering Brief
highlighted the importance of that phrase

10 Def.’s Opening Br. at 8, Avve, Inc. v. Upstack Technologies, lnc., N18C-10-011 RRC, Trans.
No. 62873859 (Jan. 17, 2019) (citing ITW Glob. Investments Inc. v. Am. Indus. Parmers Capital
Funa’ IV, L.P., 2015 WL 3970908, at *5 (Del. Super. Ct. June 24, 2015)).

and-paste[d]” its breach of contract damages into its fraud claim.ll Without any
distinction between the damages, Defendant argues, Plaintiff’s claim must be
dismissed

Lastly, Defendant contends that Plaintiff’ s fraud claim is impermissible
“‘bootstrap[ing]’ a claim of breach of contract into a claim of fraud[.]”12 Defendant
argues that Plaintiff has failed to set forth specific factual allegations to support a
reasonable inference that Defendant never intended to comply with the contract.
Defendant argues that Plaintiff “simply add[ed] the term ‘fraudulently induced’ to
[the] complaint[.]”13 As such, Defendant argues that Plaintiff’s fraud claim must be
dismissed.

B. Plaintijj"$ Contentions

In defense of Count 3, Plaintiff argues that the fraud claim is sufficiently
particularized for Rule 9(b) purposes Plaintiff urges the Court to review the
complaint as a whole, particularly the sections that Count 3 incorporates by
reference. Plaintiff argues that the complaint illustrates the specific identities of the
involved parties, and the specific time, location, and content of the alleged
misrepresentations Plaintiff alleges that Mlynsky misrepresented facts to
Hauseman. Plaintiff contends that the alleged misrepresentations occurred during
telephone conversations by email, and face-to-face from August 2016 to January
2017.14 Plaintiff relies on its characterization of the contents of the
misrepresentations in subparagraph 57(g) of the complaint15 Plaintiff contends that
if the Court would require anything more at this stage, Plaintiff would be required
“to plead evidence, which is beyond the pleadings requirement at this early stage of
the proceedings.”16

Plaintiff further argues that because the alleged misrepresentations occurred
prior to the parties entering into the contract_and were allegedly intended to induce
Plaintiff to enter into the contract_the alleged misrepresentations constitute
“separate and distinct” conduct from which a fraud claim can stand separately and

 

ll Id. (citing Khushai`m v. Tullow Inc., 2016 WL 3594752, at *6 (Del. Super. Ct. June 27, 2016)).
12 Ia'. at 9 (quoting Narrowstep, Inc. v. Onstream Media Corp., 2010 WL 5422405, at *15 (Del.
Ch. Dec. 22, 2010)).

13 Id. (quoting Narrowstep, 2010 WL 5422405, at *15).

14 See Pi.’s Am. compi. at 241, 1118-12.

15 Se@ id. at 15-16,1157.

16 Pl.’s Answ. Br. at 7, Avve, Inc. v. Upstack Technologies, lnc., N18C-10-011 RRC, Trans. No.
62945231 (Feb. 8, 2019) (citing Narrowstep, 2010 WL 5422405, at *13).

alongside a breach of contract claim.17 Plaintiff contends that the separate and
distinct nature of the conduct makes the potential damages separate from any breach
of contract damages For example, at oral argument Plaintiff’s counsel stated that
Hausman took steps in reliance on the alleged misrepresentations prior to entering
into the contract, which would result in separate damages For the same reasons,
Plaintiff argues that Count 3 does not constitute impermissible bootstrapping.

Regarding Plaintiff’ s affidavit, Plaintiff contends that it should be considered
by the Court as it addresses the particularity issues alleged by Defendant. As for its
untimeliness, Plaintiff’s counsel explained that affidavit “wasn’t something [the
client] was able to provide to [Plaintiffs counsel] until [a few days before oral
argument].”18 Plaintiff maintained that Count 3 is still sufficient without the
affidavit Plaintiff in its Answering Brief did not request, in the alternative, to
potentially later amend its complaint if Count 3 was dismissed Plaintiff addressed
this at oral argument, and stated that if the Court were to find that Count 3 was fatally
deficient under Rule 9(b), then Plaintiff “would [] have to amend” its complaint to
include the allegations contained in the affidavit.19

IV. STANDARD OF REVIEW

ln reviewing a motion to dismiss under Rule 12(b)(6) the Court “(i) accepts
all well-pleaded factual allegations as true, (ii) accepts even vague allegations as
well-pleaded if they give the opposing party notice of the claim, (iii) draws all
reasonable inferences in favor of the non-moving party, and (iv) only dismisses a
case where the plaintiff would not be entitled to recover under any reasonably
conceivable set of circumstances.”20 Although Rule l2(b)(6) permits some leniency,
the Court must “ignore conclusory allegations that lack specific supporting factual
allegations.”Z‘

Delaware is a “notice pleading” state, and in most civil actions the rules of
procedure require that the plaintiff simply provide a short and plain statement which

 

17 Id. at 10 (quoting Hiller & Arban LLC v. Reserves Mgmt. LLC, 2016 WL 3678544, at *4 (Del.
Super. Ct. July 11, 2016)).

18 Tr. of Oral Argument at 10 ln.22, Avve, lnc. v. Upstack Technologies, Inc., N18C-10-011 RRC
(Mar. 4, 2019).

191d.atioins.12_13.

20 TurfNation, Inc. v. UBUSportS, Inc., 2017 WL 4535970, at *5 (Del. Super. Ct. Oct. 11, 2017)
(citing Central Mortg. Co. v. Morgan Stanley Mortg. Capital Holdings LLC, 227 A.3d 531, 536
(Del. 2011)).

21 Ia’. (quoting Ramunno v. Crawley, 705 A.2d 1029, 1034 (Del. 1998)).

gives the defendant “fair notice of a claim[.]”22 The plaintiff “need not plead
evidence, but allege facts that, if true, state a claim upon which relief can be
granted.’723 Superior Court Civil Rule 9(b) deviates from this general rule and
imposes a heightened pleading standard for allegations of fraud.

Rule 9(b) states that “[i]n all averments of fraud, negligence or mistake, the
circumstances constituting fraud, negligence or mistake shall be stated with
particularity.”24 “The factual circumstances that must be stated with particularity
refer to the time, place, and contents of the false representations; the facts
misrepresented; the identity of the person(s) making the misrepresentation; and what
that person(s) gained from making the misrepresentation.”25 Intent, knowledge,
malice, and other states of mind may be averred generally.26 However, if the central
facet of the claim of fraud is a “charge that the defendant knew something, there
must be sufficient well-pled facts from which it can be reasonably inferred that this
something was knowable and that the defendant was in a position to know it.”27
Failure to plead with sufficient particularity can warrant dismissal of a fraud claim.

V. DISCUSSION
A. The Court will not consider Plaintij"s untimely ajj{idavit.

First, the Court will address the affidavit that Plaintiff filed in an apparent
attempt to improve its position prior to oral argument on Defendant’s motion. The
affidavit was not attached to Plaintiffs Answering Brief to Defendant’s Motion to
Dismiss, which was filed February 8, 2019. Nor did Plaintiff ask the Court for
permission to file the affidavit Instead, the affidavit was simply filed on Friday,
March l, 2019, at 4:57 p.m., along with a letter to the Court stating that Plaintiff’ s
counsel “may refer to [the affidavit] during oral argument[.]”28 Oral argument on
Defendant’s motion was scheduled for the morning of the next business day,
Monday, March 4, at 9:00 a.m. Plaintiff apparently did not attempt to advise the

 

22 VLIW Technology, LLC v. Hewlett-Packara' CO., 840 A.2d 606, 611 (Del. 2003) (citing
Michelson v. Duncan, 407 A.2d 211, 217 (Del.1979)).

23 Id.

24 super. ct. Civ. R. 9(b).

25 Trenwick Am. Litig. Tr. v. Ernst & Young, L.L.P., 906 A.2d 168, 207-08 (Del. Ch. 2006), ajj"a'
sub nom. TrenwickAm. Litig. Tr. v. Billett, 931 A.2d 438 (Del. 2007).

26 See Super. Ct. Civ. R. 9(b).

27 Trenwick, 906 A.2d at 208.

28 Letter to the Court from Pl.’s Counsel, Avve, Inc. v. Upstack Technologies, lnc., N18C-10-011
RRC (Mar. 1, 2019) (emphasis added).

Court, in any manner, that this affidavit and letter had been filed. The Court first
learned of the existence of the affidavit during oral argument when advised of same
by defense counsel during defense counsel’s opening argument.29

At oral argument, Plaintiff s counsel explained that the affidavit was intended
to address the particularity arguments raised by Defendant.30 However, the affidavit
does not address Defendant’s other arguments: 1) Plaintiffs reliance on the phrase
“and/or,” 2) allegedly impermissible bootstrapping, and 3) allegedly materially
identical damages31 As to the lateness of the filing, Plaintiff s counsel explained the
untimeliness was due to amount of papers and notes her client had to review to create
the affidavit.32 When asked by the Court why the facts in the affidavit were not set
forth in the Amended Complaint, or alternatively, attached to Plaintiff’ s Answering
Brief to give Defendant the opportunity to respond in writing to the affidavit,
Plaintiff’ s counsel stated that “. . .all l can say [is] it wasn’t something that we were
able to have our client put together.33 Plaintiff s counsel said nothing about when
Plaintiffs CEO was first requested to supply the new information, and the Court
cannot see why such particularity was not known to Plaintiff when it filed its
Amended Complaint.

The Court inquired at oral argument whether consideration of the affidavit by
the Court might transform the motion to dismiss into a motion for summary
judgment, pursuant to Rule 12(b)(6).34 Defendant objected to any such consideration
of the affidavit because of the untimeliness of its submission lf the Court were to
consider the affidavit, Defendant argued, the affidavit did not sufficiently
supplement Plaintiff s fraud claim to overcome the alleged deficiencies35 Plaintiff
argued that Rule 12(b)(6) requires that the Court “give [the parties] an opportunity
to respond and then to state whether or not [the parties] are agreeable” to the
conversion.36 The Court need only reach this Rule 12(b)(6) issue if the affidavit is
not excluded.

 

29 See Tr. of Oral Argument at 6-7.

30 Id. at 9 in.S.

31 See id. at 8 1ns.7-15.

33 See zd. at 10 ins.zi-zz, ii ins.i_i§.

33 ld. at 11 lns.11~12.

34 See Super. Ct. Civ. R. 12(b). “If`, on a motion asserting the defense numbered (6) to dismiss
matters outside the pleading are presented to and not excluded by the Court, the motion shall be
treated as one for summary judgment and disposed of as provided in Rule 56[.]” Ia’.

33 See Tr. of Oral Argument at 22.

36 ld. at 9 1ns.15_16.

Delaware courts are afforded broad discretion to enforce court orders and
rules of procedure.37 Pursuant to Rule 107(f) the Court is vested with discretion to
allow an untimely submission upon a “showing of good cause in writing[.]”38 “Good
cause is likely to be found when the moving party had been diligent, the need for
more time was neither foreseeable nor its fault, and refusing to grant the continuance
would create a substantial risk of unfairness to that party.”39 lf such a showing is not
made, the Court “in its discretion [can] take such other action as it deems
necessary to expedite the disposition of the case.”‘“)

Here, Plaintiff’s counsel’s only explanation for the untimely filing was that
her client was unable to complete the affidavit or otherwise communicate the facts
in the affidavit to Plaintiffs counsel at a much earlier date. Despite the apparent
known delay however, Plaintiff did not seek to notify the Court that there was a
pending affidavit which may be pertinent to the merits of Defendant’s Motion to
Dismiss Nor did Plaintiff request leave to file a supplemental response out of time,
or, apparently, contact Defendant’s counsel about this issue. Additionally, it appears
to the Court that the few facts set forth in the affidavit could have been included in
the Amended Complaint. Plaintiff has not provided a satisfactory explanation as to
why the facts were produced at such a late date. Further, Plaintiff’s actions, or lack
thereof, have deprived Defendant of the opportunity to respond in writing to the
affidavit and its contents Such a scenario does not constitute excusable neglect or
good cause. The affidavit will be excluded, and the Court will not consider its
contents

B. Count 3 of Plaintiff ’s Amended Complaint fails t0 satisfy the heightened
pleading standard of Rule 9(b).

In Count 3, Plaintiff alleges Defendant committed fraud in the inducement by
making several misrepresentations as to the nature of Defendant’s business, and the
skill and credentials of Defendant’s employees By claiming that Defendant
committed fraud, Plaintiff must comply with the heightened standards of Rule 9(b).
Plaintiff must state with particularity factual circumstances relating to the identity of
the person making the misrepresentations as well as the time, place, and contents of

 

37 See generally Solow v. Aspect Resources, LLC, 46 A.3d 1074, 1075 (Del. 2012) (“Delaware trial
courts have inherent power to control their dockets.”); Coleman v. PricewaterhouseCoopers, LLC,
902 A.2d 1102, 1108 (Del. 2006) (ruling that plaintiffs’ affidavit was properly excluded as
untimely expert testimony).

38 Super. Ct. Civ. R. 107(f).

39 Lundeen v. PricewaterhouseCoopers, LLC, 2007 WL 646205, at *2 (Del. Mar. 5, 2007).

40 Super. Ct. Civ. R. 107(f).

10

false representations41 Although Count 3 of Plaintiff s Amended Complaint states
with particularity the identity of the person allegedly making the misrepresentations
Mlynsky, the remainder of Count 3 is not sufficiently particular under Rule 9(b).

Plaintiff’s fraud claim in Count 3 is similar to the fraud claim brought in this
Court in Khushaim v. T allow Inc. ln Khushaim, the plaintiff alleged that the
defendant not only breached a contract, but committed fraud by making “several
false statements and misrepresentations of material fact regarding essential parts of
the [underlying contract.]”42 Khushaim alleged that Tullow falsely stated that “they
would develop the subject mobile applications that they would deliver final versions
of the two mobile applications and that they would return Kushaim's copyrighted
software designs.”43

Tullow moved to dismiss Khushaim’s claim of fraud arguing that the
allegations did not meet Rule 9’s particularity standard, much the same as
Defendant’s motion before the Court now. The Khushaim Court ultimately held that
“[n]othing in Khushaim’s Complaint approaches Rule 9(b)’s particularized facts
standard”44 Khushaim’s fraud claim was ruled deficient because Khushaim merely
alleged that Tullow “knew or should have known”45 that it made misrepresentations
and “what little content Khushaim provide[d] [was] a simple reprise of the
allegations made in Khushaim's breach of contract claim.”46 Khushaim supported
his fraud claim “with nothing more than Tullow's alleged intention not to follow
through with its contractual obligations[.]”47

Plaintist Count 3 is deficient in a similar manner to the Khushaim fraud
claim. The allegations in Count 3 are simply generalized accusations that Defendant
did not intend to fulfill contractual obligations The complaint lists eight ways
Mlynsky allegedly misrepresented the nature of Defendant’s business and its ability
to perform.48 The listed misrepresentations are not purported to be direct quotations
or semi-quotations of Mlynsky’s statements Rather, the list appears to the Court to
be the general character of what Mlysnky was to have allegedly represented Further,

 

41 See Trenwick, 906 A.2d at 208.

43 Khushaim v. Tullow, lnc., 2016 wL 3594752, at *5 (Dei. super. ct. June 27, 2016).
43 id.

44 Id.

43 1a

46 1a at *6.

43 la

43 See Pi.’s Am. Compl. at1157; See also id. at 1119-1 i.

11

none of the alleged misrepresentations are connected to any particular
communication between the parties

Count 3’s description of the timing of the fraudulent conduct is imprecise.
Plaintiff contends that Mlynsky made false statements “during the course of [] pre-
contract email communications and meetings[.]”49 These communications occurred
over a six-month time period, from August 2016 to January 2017. There was the
alleged phone conversation between the parties’ CEOS “in or about August
2016[.]”50 There were the alleged email communications between the CEOs from
August 2016 to January 2017. Finally, there was the alleged face to face meeting “in
or about the end of J anuary 2017[.]”51 The complaint does not provide more specific
dates and Plaintiff does not link any specific conversation to any one of the listed
alleged misrepresentations lt is unclear to the Court why the complaint does not
provide the precise date for the late January 2017 meeting between the CEOs. Far
more perplexing is the failure to provide the specific dates and the content of the e-
mail conversations considering electronic communication is generally a permanent
medium.

Notably, Plaintiff injects additional ambiguity into the allegations of fraud by
relying upon the phrase “and/or” when identifying the alleged misrepresentations52
By its very nature, “and/or” is an ambiguous phrase which often produces
uncertainty.53 Courts and legal writing scholars are largely in agreement that
“and/or” is “much-maligned and overused and generally should be avoided[.]”54
Courts and legal writers routinely condemn the phrase.55

 

49 Pla.’s Answ. Br. at 7; see Pl.’s Am. Compl. at 11 11.

50 Pla.’s Answ. Br. at 2

34 ld. at 3.

33 see Pi.’s Am. Compl. at1157.

53 See William Strunk Jr., Elements of Style, at 40 (4th ed 1990) (explaining that and/or is “[a]
device, or shortcut, that damages a sentence and often leads to confusion or ambiguity.”).

34 Sandman v. Farmers Ins. Exch., 969 P.2d 277, 281 (Mont. 1998); see Bryan A. Gamer, The
Elements of Legal Style 103 (2d ed. 2002) (“Banish from your working vocabulary [‘and/or’].”);
Bryan A. Gamer, T he Redbook.' A Manual on Legal Style 43 (2002) (“The slash is known as
the star character in two grammatical abominations: and/or and he/she. lt is especially unfit for
legal Writing because it is inherently ambiguous”).

55 “It is manifest that we are confronted With the task of first construing ‘and/or,’ that befuddling,
nameless thing, that Janus-faced verbal monstrosity, neither word nor phrase[.]” Employers' Mut.
Liability Ins. CO. of Wisconsin v. Tollefsen, 263 N.W. 376, 377 (Wis. 1935). See also California
Trout Inc. v. State Water Resources Bd., 207 Cal. App. 3d 585, 603 n.8 (Cal. Ct. App. 3d 1989)
(condemning and/or as “taboo”); Raine v. Drasin, 621 S.W.2d 895, 905 (Ky. 1981) (“This error is

12

When the Court asked Plaintiffs counsel “why use [and/or,]” Plaintiff’s
counsel explained that it was used “to the extent that one [allegation] does not
survive throughout the discovery period.”56 Regardless of intent, the phrase has
created demonstrable ambiguity in Count 3. The phrase allows Plaintiff essentially
to rely on only one specific claim of fraud-which potential sole claim is not
identified*~or allows Plaintiff to potentially rely on up to all eight specific
allegations or some combination of the eight allegations thereof Plaintiff’ s use of
the phrase suggests in Defendant’s words that Plaintiff is not “sure which of the
alleged misstatements may actually have happened in the first place.”57 The use of
such a phrase, and the ambiguity it creates is almost always inappropriate in a Rule
9(b) pleading In some other context the phrase might not be as problematical,
perhaps even innocuous However, in the instant Rule 9(b) context the ambiguous
phrase serves to contribute to Count 3’s fatal deficiencies

The complaint states the general character of the alleged misrepresentations
The complaint states that the alleged misrepresentations occurred over a period of
six months but does not state what conduct falls where or how the content was
communicated Further, the language of the complaint creates a situation where any
of the alleged misrepresentations could have occurred at any of the conversations
Such an imprecise set of facts lacks enough particularity to fully apprise Defendant
of the allegations of fraud and does not satisfy the particularity requirements of Rule
9(b). Count 3 will be dismissed

C. T he Court will not grant Plaintiij leave to amend Count 3 of the amended
complaint

Plaintiff stated, for the first time at oral argument, that if the Court were to
dismiss Count 3 for failure to satisfy Rule 9(b) Plaintiff could “cure” any deficiencies
with the affidavit.58 As previously discussed, the Court has inherent power to control
its dockets and maintain orderly adjudication of claims59 Pursuant to Rule 15, a
party may amend a pleading upon a request to the Court, and “leave [to amend] shall
be freely given when justice so requires.”60 ln this case, Plaintiff previously had the

 

achieved by use of the much condemned conjunctive-disjunctive crutch of sloppy thinkers
and/or.”).

36 Tr. of Oral Argument, at 16 lns.1-5.

57 Def.’s Reply Br., at 1.

58 See Tr. Of Oral Argument, at 10 ln.7.

59 See Solow v. Aspect Resources, LLC, 46 A.3d 1074, 1075 (Del. 2012) (“Delaware trial courts
have inherent power to control their dockets.”).

443 super. ct. R. civ. 15(3).

13

opportunity to amend its complaint to conform to Delaware law, but the attempt has
been unsuccessful Plaintiff stated that if it was allowed to amend the complaint it
would simply add the information from its untimely affidavit.6l Plaintiff has not
provided a satisfactory explanation as to why the information in its affidavit could
not have been included in the prior complaints in the first place. “lt is no small matter
to be accused of fraud,”62 and the Court will not grant Plaintiff permission to
continuously amend its accusation until something sticks Plaintiff shall not be
permitted to amend its complaint to address its allegations of fraud

VI. CONCLUSION

Plaintiff has failed to plea the elements of fraud with sufficient particularity
Plaintiffs allegation of fraud is averred generally, contrary to the requirements of
Rule 9(b). As such, Count 3 must be dismissed For the foregoing reasons
Defendant’s Motion to Dismiss Count 3 of Plaintiffs Amended Complaint is

GRANTED.63
IT IS SO ORDERED.

walder-§

Richard R. Cooch, R.J.

cc: Prothonotary

 

61 See Tr. of Oral Argument, at 10 lns.12-14.

62 Def.’s Reply Br., at 2.
63 As the Court finds that Count 3 of the Amended Complaint is violative of Rule 9(b), the Court

need not reach Defendant’s alternative arguments in support of dismissal of Count 3 of “materially
identical damages” or “impermissible bootstrapping.”

14