Delaware Business Litigation Report

Superior Court Denies Motion to Dismiss Damages Claim as Speculative in Breach of Contract Case

Enigma Information Retrieval Systems, Inc. v. Radian, Inc., C.A. No. 04C-06-069 FSS, 2005 WL 445568 (Del. Super. Ct. Feb. 23, 2005). Plaintiff, Enigma Information Retrieval Systems, Inc. ("Enigma"), brought breach of contract and tortious interference claims against Defendants, Radian, Inc. and Portal Dynamics, Inc., military contractors that helped supply light armored vehicles. Enigma acted as the subcontractor for the defendants and provided the computer software for training manuals and parts catalogs. The defendants claimed to have terminated Enigma for poor performance. Radian moved to dismiss the damages claim, and the court denied the motion to dismiss, finding that the arguments were premature. Specifically, Radian moved to partially dismiss the claim, arguing that Enigma's damages claim was speculative. Radian argued that Enigma could not prove it was entitled to 25 years worth of damages because government contracts can be cancelled for many reasons, including cancellation for the government's convenience. Additionally, Radian contended that Enigma could not prove it was entitled to 25 years of lost payments because Enigma had not pled facts supporting the allegation that the software would actually be used by the military for 25 years. Although the court noted that Radian made strong arguments, the court also found the arguments to be premature. It noted that some military equipment is in service for decades and Enigma was entitled to call witnesses to attempt to prove its damages. However, the court also explained that the claim would be for lost profits rather than the lost payments to which Enigma claimed it was entitled. Authored by: Jason C. Jowers 302-888-6860 jjowers@morrisjames.com Share