Delaware Business Litigation Report

District Court Grants Summary Judgment on Contract, Fraud Claims

Rimmax v. RC Components, Inc., 2007 WL 521214 (D.Del. Feb. 21, 2007).

Plaintiff asserted breach of contract, fraud, and intentional interference with contractual relations, arising out of a purported agreement between the parties to manufacture wheel covers for motorcycles. Under Plaintiff’s theory, Plaintiff and Defendant agreed to manufacture the covers based on allegedly confidential information and proprietary technology that Plaintiff provided. Plaintiff asserted that Defendant breached their contract to manufacture and supply the covers, then misappropriated Plaintiff’s confidential information, proprietary technology, and actual and potential contractual relations. The District Court of Delaware granted Defendant’s motion for summary judgment, finding that Plaintiff had not provided sufficient evidence on any of its claims to withstand the motion.

Plaintiff argued that Defendant breached their agreement by not providing 34 of 54 sets of the wheel covers and by refusing to return the payment Plaintiff made for these undelivered wheel covers. Although the Court found that the parties did agree that Defendant would manufacture 54 sets of the covers, the Court also found that Plaintiff had not presented sufficient factual evidence that the amount Plaintiff paid to Defendant was sufficient to cover the cost of 54 sets, and that partial payment “excused [D]efendant’s further performance.” Plaintiff also argued that Defendant breached an intellectual property and confidentiality agreement the parties entered into when Defendant failed to return the confidential information and proprietary technology that Plaintiff provided during the relationship, and instead sold the covers under its own name to Plaintiff’s customers. However, the Court ruled that Plaintiff had not presented sufficient evidence of the design or engineering information that Defendant appropriated. Finally, Plaintiff argued that Defendant defrauded Plaintiff when it required Plaintiff’s order list and customer shipping addresses.  The Court rejected this claim, finding that Plaintiff presented no evidence of either the falsity of Defendant’s representation that it needed the information for shipping purposes or of Defendant’s intent to defraud Plaintiff. Plaintiff also argued that Defendant intentionally interfered with Plaintiff’s contractual relations with existing and potential customers. However, the Court found no record evidence that substantiated Plaintiff’s claims of damaged business relations.

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