Delaware Business Litigation Report

Superior Court finds that Defendant Breached Contract By Failing to Pay Invoices and Waived Any Right to Claim Fraudulent Misrepresentation as a Defense

Immedient Corp. v. HealthTrio, Inc., C.A. No. 01C-08-216 RRC, 2005 WL 1953027 (Del. Super. Ct. June 22, 2005). The plaintiff brought an action for breach of contract, and the defendant counterclaimed for fraudulent misrepresentation. Following a non-jury trial, the Court found that the defendant breached the contract, and had waived its right to claim fraudulent misrepresentation on part of the plaintiff. In November 2000, the defendant, HealthTrio, Inc., entered into a Professional Services Agreement ("PSA") contract with the plaintiff, Immedient Corp, in which Immedient was to develop computer software for HealthTrio. At trial, Immedient argued that HealthTrio failed to pay for the services it provided. HealthTrio defended the breach of contract claim by arguing that Immedient breached the contract first by 1) fraudulently misrepresenting its ability to perform the services and 2) failing to "properly" perform the contract pursuant to certain specifications. The Court found that HealthTrio breached the contract for not paying. Furthermore, it rejected Health Trio's defenses. Specifically, the Court determined that HealthTrio waived its right to claim fraudulent misrepresentation when it failed to timely object to the invoices and by entering into subsequent Time and Material Statement of Work ("T & M SoW"), which further defined the parties' contractual obligations. Finally, the Court rejected the defendants claim that Immedient failed to perform the contract properly because HealthTrio failed to show that certain technical documents had been incorporated into the parties' agreement. Authored by: Jason C. Jowers 302-888-6860 jjowers@morrisjames.com Share