Mikkilineni v. PayPal, Inc. ( 2021 )

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
MAHESWAR MIKKILINENI, )
)
Plaintiff, )
)
v. ) C.A. No. N19C-05-123
) PRW CCLD
)
PAYPAL, INC., GODADDY.COM, LLC, )
SHIJIL TS, CEO, HARVARD )
COLLEGE OBSERVATORY & )
HARVARD UNIVERSITY, AND )
UPWORK INC. )
)
Defendants. )
Submitted: May 24, 2021
Decided: July 1, 2021
Upon Defendant PayPal, Inc.’s Motion to Dismiss,
GRANTED.
Upon Defendant GoDaddy.com, LLC’s Motion to Dismiss,
GRANTED.
Upon Defendant Upwork Inc.’s Motion to Dismiss,
GRANTED.
MEMORANDUM OPINION AND ORDER
Maheswar Mikkilineni, Newark, Delaware, Pro se.
Kristen S. Swift, Esquire, WEBER GALLAGHER SIMPSON STAPLETON FIRES & NEWBY
LLP, New Castle, Delaware, Attorney for Defendant PayPal, Inc.
Gregory Fischer, Esquire, COZEN O’CONNOR, Wilmington, Delaware; Harper S.
Seldin, Esquire, COZEN O’CONNOR, Philadelphia, Pennsylvania, Attorneys for
Defendant GoDaddy.com, LLC.
Nicholas T. Verna, Esquire, WOMBLE BOND DICKINSON (US) LLP, Wilmington,
Delaware, Attorney for Defendant Upwork Inc.
WALLACE, J.
Plaintiff Maheswar Mikkilineni has wielded litigation in three Delaware
courts to resolve loosely-connected allegations against an assortment of business
entities and quasi-governmental institutions stemming from his attempts to host,
encode, and grow a website designed to commercialize his scientific and religious
views about the atomic underpinnings of the universe. No doubt his zeal and caring
are genuine. And, while doggedly persistent, Mr. Mikkilineni has been nothing but
civil and gentlemanly in his pursuit of entities he believes have wrongfully
obstructed these goals of enlightenment. But unfortunately, that pursuit of certain
entities via the particular claims brought here has travelled a blind path and must
come to an end.
Central to this decision are the claims Mr. Mikkilineni has leveled at
defendants PayPal, Inc., GoDaddy.com, LLC, and Upwork Inc. He accuses PayPal
of negligently handling his payment dispute with a third-party website developer
whom he, in turn, has accused of stealing his money and infringing his intellectual
property. He insists that GoDaddy’s faulty servers have caused his website to glitch
and leak proprietary data. And he urges that Upwork wrongly refused to squash a
problem he had with a freelance animation artist Upwork recruited. PayPal and
GoDaddy have moved to dismiss under Rule 12(b)(6), contending that Mr.
Mikkilineni has failed to state any reasonably conceivable or procedurally-proper
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claims. Upwork has moved to dismiss on jurisdictional grounds, arguing that Mr.
Mikkilineni must arbitrate his claims.
Mr. Mikkilineni is a retired physicist and engineer, not a lawyer. So, the Court
has construed his four, pro se complaints with as much liberality as Delaware law
permits. Nevertheless, even given the generous and forgiving read the Court has
afforded them, nothing explicit or implicit in Mr. Mikkilineni’s filings reveals a
remediable injury. One could laud Mr. Mikkilineni’s near Quixotean efforts to
represent himself here and elsewhere. But the defendants’ motions must be
GRANTED. Accordingly, and for the reasons discussed below, the various claims
against them are DISMISSED WITH PREJUDICE.
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I. FACTUAL BACKGROUND1
A. THE ALLEGATIONS INVOLVING PAYPAL, GODADDY AND UPWORK.
Mr. Mikkilineni owns and publishes “Maheswar.org”—a “research” and
“educat[ional]” website created to refute mainstream physics with the teachings of
Indra.2 Mr. Mikkilineni has been inspired by what he believes to be incorrect, but
nevertheless academically-accepted, laws of the universe advanced by theorists like
“Einstein” and “Sagan,” professional astronomers, and former Presidents of the
United States.3 Using Maheswar.org, Mr. Mikkilineni hopes to capitalize on his
1
The Court limits its factual recitations to the circumstances relevant for resolving this piece of
Mr. Mikkilineni’s lawsuit. Mr. Mikkilineni’s practice has been to “amend” his complaints by
adding arguments against the defendant’s motions without changing his core assertions. But cf.
GWO Litig. Tr. v. Sprint Sols., Inc., 2018 WL 5309477, at *17 n.177 (Del. Super. Ct. Oct. 25,
2018) (citing Ct. Ch. R. 15(aaa)) (noting that a party cannot amend a pleading with a responsive
filing); In re Ezcorp. Inc. Consulting Agreement Derivative Litig., 130 A.3d 934, 941 (Del. Ch.
2016) (explaining that one purpose of the Court of Chancery’s amendment rules is to curb
“seriatim complaints”). As a result, the Court draws the key allegations from Mr. Mikkilineni’s
third amended complaint, see Am. Compl., Apr. 30, 2021 (D.I. 97) (hereinafter “Compl.”), which
is the operative one under this Court’s Civil Rules, and from the exhibits that are integral to, and
incorporated in, that complaint, see generally Windsor I, LLC v. CWCap. Asset Mgmt. LLC, 238
A.3d 863, 873 (Del. 2020) (enumerating the species of external documents and publications that a
court may consider on a motion to dismiss); see also Malpiede v. Townson, 780 A.2d 1075, 1083
(Del. 2001) (“[A] claim may be dismissed if allegations in the complaint or in the exhibits
incorporated into the complaint effectively negate the claim as a matter of law.”). To be clear, for
the sake of completeness, and given his pro se status, the Court also has considered any variations
on these allegations that were presented in Mr. Mikkilineni’s other complaints too. See generally
Compl., May 17, 2019 (D.I. 1); Am. Compl., July 19, 2019 (D.I. 40); Am. Compl., Mar. 16, 2020
(D.I. 68).
2
Compl. ¶¶ 2.0(a), (e). Indra is a deity worshipped by followers of Hinduism and credited with
mastering and generating certain natural forces. See generally Indra, ENCYCLOPEDIA BRITTANICA,
https://www.britannica.com/topic/indra (last visited June 16, 2021).
3
Compl. ¶¶ 2.0(b)–(e).
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philosophies by selling membership interests to non-profit companies, lay
subscribers, and “investors.”4 To achieve that goal, Mr. Mikkilineni had turned to
the service providers and the public and private organizations he now has sued.
Having secured a server for Masheswear.org from GoDaddy, which hosts
internet domains, Mr. Mikkilineni contracted with defendant SparkSupport Infotech
Pvt. Ltd. (“Spark”), an India-based coder and website developer, to obtain the latter’s
assistance with the “Task 1 and 2” phases of Maheswar.org’s formation (e.g.,
“webRTC” and “video-audio” capabilities).5 Under the terms, Spark purportedly
agreed to complete all its projects by late June 2018 in exchange for two “advance-
fees” of $4,000, “proprietary-data,” passwords, and pre-existing code.6
Mr. Mikkilineni transferred the funds from his personal account through PayPal, a
transactional intermediary that offers banking and e-commerce products to its users.7
Spark allegedly missed its first deadline.8 So, Mr. Mikkilineni availed himself
of PayPal’s internal dispute-resolution procedures to extract a refund.9 Alerted to
4
Id. ¶ 2.0(e).
5
Id. ¶ 2.1.
6
Id. ¶ 2.2.
7
Id. ¶¶ 2.2(a)–(b).
8
Id. ¶¶ 2.3(a)–(b).
9
Id. ¶ 2.3(d).
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the payment dispute, Spark reappeared and renegotiated its deadlines with
Mr. Mikkilineni.10 Given Spark’s assurances, Mr. Mikkilineni dropped the
dispute.11
When the revised deadline arrived, however, Spark apparently again failed to
deliver.12 At this point, Mr. Mikkilineni suspected that Spark never had intended to
perform, but rather sought to pocket his fees and misappropriate his proprietary
information and intellectual property.13 That suspicion prompted Mr. Mikkilineni
to revive his payment dispute on PayPal.14 Consistent with PayPal’s dispute process,
Spark and Mr. Mikkilineni adduced competing versions of what went wrong.
After considering Mr. Mikkilineni’s “evidence,” PayPal reimbursed only one
of the two $4,000 advance-fees, clearing the residual.15 Mr. Mikkilineni alleges that
PayPal, harboring “bad-faith,” did not support its determination with any provision
10
Id. ¶ 2.3(e).
11
Id. ¶ 2.3(f).
12
Id. ¶ 2.3(g).
13
Id. ¶¶ 2.3(h), 2.4.
14
Id. ¶ 2.4.
15
Id. ¶ 2.4(b).
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in its “user agreement.”16 That was so, continues Mr. Mikkilineni, despite an
affirmative duty on PayPal to redress “IP infringement.”17
Adding insult to his injuries, Mr. Mikkilineni asserts that, during these events,
his relationships with GoDaddy and Upwork deteriorated. GoDaddy’s internet
servers allegedly caused Maheswar.org to glitch, resulting in confusing e-mail
messages and unhelpful troubleshooting with GoDaddy’s support hotline.18 The
submission form errors, Mr. Mikkilineni posits, also have facilitated the theft of
Maheswar.org’s data.19 And Upwork—a recruiting firm—allegedly connected
Mr. Mikkilineni to a freelance animation artist who was supposed to sculpt a 3D
model for Masheswar.org but instead absconded with his payment and the original
animation file.20 The issue, Mr. Mikkilineni says, is not the freelancer’s non-
performance; it is Upwork’s refusal to get meaningfully involved.21
16
Id. ¶ 2.4(c).
17
Id. ¶ 2.5(e).
18
Id. ¶¶ 3.0–3.1.
19
Id.
20
Id. ¶¶ 5.0(a)–(i).
21
Id. ¶¶ 5.0(e)–(f).
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To right wrongs inflicted on “the People” by agents of “selfish [] power,”22
Mr. Mikkilineni has prosecuted his case in the Delaware Justice of the Peace Court,
the United States District Court for the District of Delaware, and this Court.
B. THE JUSTICE OF THE PEACE COURT LITIGATIONS.
Mr. Mikkilineni first brought PayPal to the Justice of the Peace Court.23 He
claims to have asked for an order compelling PayPal to honor its user agreement.
But the cover sheet to his complaint asserted money damages.24 As a result, the
court construed his allegations as a breach-of-contract claim for the remaining
$4,000 advance-fee. The parties conducted a trial on that issue.
At the conclusion of Mr. Mikkilineni’s case-in-chief, PayPal moved for, and
obtained, a directed verdict.25 Mr. Mikkilineni did not appeal that ruling. Instead,
he filed a motion styled as one for “a new trial or reargument.” As support for his
motion, Mr. Mikkilineni cited the coffee he had for lunch, which inhibited his
22
Id. ¶¶ 1.0–1.1, 1.3.
23
Ex. A to Def.’s Mot. to Dismiss, June 19, 2019 (D.I. 20) (J.P. Ct. Compl.).
24
Id.
25
Ex. B to Def.’s Mot. to Dismiss at 3 (D.I. 20) (Order).
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presentation by “drugging” him and temporarily depriving him of his hearing.26 The
court denied the motion.27 Mr. Mikkilineni did not appeal that ruling either.
In a second trip to that same judicial well, Mr. Mikkilineni next sued Upwork
in the Justice of the Peace Court.28 He sought the return of the animation file that
the freelancer abducted via a prayer for a judicial order compelling Upwork to do
something about it.29 Citing its user agreement, Upwork argued that Mr. Mikkilineni
agreed to arbitrate his claim in California, and alternatively, there was no way it
could have breached the agreement between him and the freelancer, as it was not a
party to that contract.30 The J.P. Court accepted Upwork’s arbitration arguments,
and dismissed the case with prejudice for lack of subject matter jurisdiction. 31 Yet
again, Mr. Mikkilineni declined to appeal.
C. THE CURRENT LITIGATION AND ITS TRAVAILS.
Mr. Mikkilineni originally named only (1) PayPal, (2) GoDaddy, (3) Spark,
and (4) the Chandra X-Ray Center (the “CXC”) of the Harvard-Smithsonian Center
26
Ex. C to Def.’s Mot. to Dismiss at 4-5 (D.I. 20) (Mot.).
27
Ex. D. to Def.’s Mot. to Dismiss (D.I. 20) (Order).
28
Exs. A & C to Def.’s Mot. to Dismiss (D.I. 108) (Compl.).
29
Ex. D to Def.’s Mot. to Dismiss at 1 (D.I. 108) (Order).
30
Id. at 1–2.
31
Id. at 2.
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for Astrophysics and the CXC’s “Director” as parties. Mr. Mikkilineni had sued the
CXC and its Director (in her individual capacity) because, in his view, the CXC and
its personnel squandered their federal funding by rejecting his request to capture
photos of neutrons using the CXC’s imagers and telescopes.32 Almost immediately,
PayPal and GoDaddy moved to dismiss under Rule 12(b)(6).
Mr. Mikkilineni’s inclusion of the CXC’s Director—a federal employee
acting within the scope of her employment—led the CXC to observe that, by statute,
he actually had sued the United States.33 So, the CXC removed to Delaware’s federal
district court. There, the CXC obtained dismissal of itself on sovereign immunity
grounds.34 Having discharged the CXC, the court remanded the rest of the case here.
Since his return from federal court, Mr. Mikkilineni has unloaded a
blunderbuss of amended complaints. Having found no new factual assertions in any
iteration, PayPal and GoDaddy renewed their motions to dismiss. But, through his
32
Ex. to Compl. (D.I. 98) (CXC Rejection Letter).
33
Notice of Removal (D.I. 36); see generally 28 U.S.C. § 2679(d)(l) (“Upon certification by the
Attorney General that the defendant employee was acting within the scope of his office or
employment at the time of the incident out of which the claim arose, any civil action or proceeding
commenced upon such claim in a United States district court shall be deemed an action against the
United States under the provisions of this title and all references thereto, and the United States
shall be substituted as the party defendant.”).
34
Mem. at 5, Mikkilineni v. PayPal, Inc., et al., 19-cv-01391-CFC-SRF (D. Del. Feb. 21, 2020),
ECF No. 34 (D.I. 78) (adopting R. & R.); Order at 1–2, Mikkilineni v. PayPal, Inc., et al., 1:19-
cv-01391-CFC-SRF (D. Del. Feb. 21, 2020), ECF No. 35 (D.I. 80) (dismissing the CXC and its
Director).
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filings, Mr. Mikkilineni—inadvertently or otherwise—resurrected the CXC and its
governmental affiliates. As a result, the United States Attorney for the District of
Delaware intervened, removing the case to federal court again and forcing a second
deferral of PayPal and GoDaddy’s motions.35 Once more, the Delaware district
court dismissed the CXC and its managers and remanded everyone else back here.
The Court now has the latest of Mr. Mikkilineni’s amended complaints, which
substitutes the Harvard College Observatory (the “HCO”) for the CXC and adds
Upwork.36 In this installment, Mr. Mikkilineni has listed the claims he believes he
has stated:
(1) PayPal: “negligence and/or gross-Negligence”; and “bad-faith and/or
fraud”;
(2) Spark: “breach of contract;” “negligence and/or gross-negligence”; and
“bad-faith and/or fraud”;
(3) GoDaddy: “negligence and/or gross-negligence”;
(4) The HCO: “negligence and/or gross-negligence”; “bad-faith and/or
fraud”; and “due process under 14th or 5th amend.”; and
(5) Upwork: “negligence and/or gross-negligence”; “tort or wrongful
interference with a contract”; and “bad-faith and/or fraud”.37
35
Notice of Removal (D.I. 84).
36
Mr. Mikkilineni’s allegations against the HCO, which indirectly controls the CXC through the
Harvard-Smithsonian Center for Astrophysics, are identical to the allegations he had made against
the CXC. Compl. ¶ 1.4.
37
Id. at 21–22 (pdf. p. 22–23).
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But Mr. Mikkilineni hasn’t specified the remedies he seeks for this misconduct.38
For the third time, PayPal and GoDaddy have moved to dismiss. Together,
they argue that none of these claims is reasonably conceivable. Separately, (1)
PayPal contends that Mr. Mikkilineni is barred by the doctrines of res judicata and
collateral estoppel from re-litigating claims that were or could have been brought in
the Justice of the Peace Court; and (2) GoDaddy asserts that, pursuant to the parties’
Arizona forum selection clause, Mr. Mikkilineni has sued it in the wrong place.
For its part, Upwork has moved under Rule 12(b)(1). It contends—as it did
before in the Justice of the Peace Court—that only a California arbitrator has
jurisdiction over Mr. Mikkilineni’s claims.
Unsurprisingly, Mr. Mikkilineni has opposed all these motions.
In ruling on the motions, the Court will evaluate Mr. Mikkilineni’s list of
counts and any implicit counts that would have made the list had they been crafted
with the assistance of counsel. As explained below, whether articulated clearly or
not, Mr. Mikkilineni’s claims against these three defendants must be dismissed.
38
See, e.g., id. at 21 (pdf. p. 22) (“[The] plaintiff requests this Court for discovery of evidence
and a trial in the matter, in the interest of Justice. Plaintiff requests this Court for a Jury trial on the
claims. . . .”).
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II. STANDARDS OF REVIEW
A. MOTION TO DISMISS FOR FAILURE TO STATE A CLAIM.
A party may move to dismiss under this Court’s Civil Rule 12(b)(6) for failure
to state a claim upon which relief can be granted.39 In resolving a Rule 12(b)(6)
motion, the Court (1) accepts as true all well-pleaded factual allegations in the
complaint; (2) credits vague allegations if they give the opposing party notice of the
claim; (3) draws all reasonable factual inferences in favor of the non-movant; and
(4) denies dismissal if recovery on the claim is reasonably conceivable.40
Delaware’s pleading standard is “minimal.”41 Dismissal is inappropriate unless
“under no reasonable interpretation of the facts alleged could the complaint state a
claim for which relief might be granted.”42
“A pro se complaint, however inartfully pleaded,”43 is “judged by a less
stringent standard than a pleading or document filed by an attorney.”44 But “there is
39
Del. Super. Ct. Civ. R. 12(b)(6).
40
Cent. Mortg. Co. v. Morgan Stanley Mortg. Cap. Holdings LLC, 27 A.3d 531, 535 (Del. 2011).
41
Id. at 536 (citing Savor, Inc. v. FMR Corp., 812 A.2d 894, 895 (Del. 2002)).
42
Unbound Partners Ltd. P’ship v. Invoy Holdings Inc., 2021 WL 1016442, at *3 (Del. Super.
Ct. Mar. 17, 2021) (internal quotation marks omitted); see Cent. Mortg., 27 A.3d at 537 n.13 (“Our
governing ‘conceivability’ standard is more akin to ‘possibility. . . .’”).
43
Browne v. Robb, 583 A.2d 949, 959 (Del. 1990).
44
Johnson v. State, 442 A.2d 1362, 1364 (Del. 1982) (internal quotation marks omitted).
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no different set of rules for pro se plaintiffs.”45 That means the Court need not
“accept conclusory allegations unsupported by specific facts or . . . draw
unreasonable inferences in favor of the non-moving party.”46 And that also means
the Court is relieved of “every strained interpretation of the allegations proposed by
the plaintiff. . . .”47 Accordingly, though the Court is “[c]ognizant of the difficulties
faced by pro se” litigants,48 it cannot “sacrifice the orderly and efficient
administration of justice”49 or impair “the substantive rights of [represented]
parties”50 to save their claims when their claims plainly have no merit.
45
Anderson v. Tingle, 2011 WL 3654531, at *2 (Del. Super. Ct. Aug. 15, 2011) (quoting Draper
v. Med. Ctr. of Del., 767 A.2d 796, 799 (Del. 2001)).
46
Price v. E.I. DuPont de Nemours & Co., 26 A.3d 162, 166 (Del. 2011), overruled on other
grounds by Ramsey v. Ga. S. Univ. Advanced Dev. Ctr., 189 A.3d 1255, 1277 (Del. 2018).
47
Malpiede, 780 A.2d at 1083.
48
Batchelor v. Alexis Props., LLC, 2018 WL 5919683, at *7 (Del. Super. Ct. Nov. 13, 2018).
49
Damiani v. Gill, 2015 WL 4351507, at *1 (Del. July 14, 2015) (internal quotation marks
omitted); see, e.g., Sloan v. Segal, 2008 WL 81513, at *7 (Del. Ch. Jan. 3, 2008) (“Delaware courts,
at their discretion, look to the underlying substance of a pro se litigant’s filings rather than rejecting
[those] filings for formal defects. . . . [H]owever, self-representation is not a blank check for
defect.” (internal quotation marks and citations omitted)); Harrison v. Hodgson Vocational Tech.
High Sch., 2007 WL 3112479, at *2 (Del. Super. Ct. Oct. 3, 2007) (A pro se complaint “must, at
a minimum, provide the Court with enough information to conduct a meaningful consideration of
the merits.”).
50
Alston v. State, 2002 WL 184247, at *1 (Del. Super. Ct. Jan. 28, 2002); see also In re Est. of
Hall, 2005 WL 2473791, at *1 (Del. Aug. 26, 2005) (“While this Court allows a pro se litigant
leeway in meeting the briefing requirements, the brief at the very least must assert an argument
that is capable of review.” (citing Yancey v. Nat’l Tr. Co., Ltd., 1996 WL 309819, at *1 (Del. May
19, 1998))); Vick v. Haller, 1987 WL 36716, at *1 (Del. Mar. 2, 1987) (observing that a pro se
complaint must be dismissed where “it appears that the plaintiff can prove no set of facts in support
of his claim [that] would entitle him to relief”).
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B. MOTION TO DISMISS FOR LACK OF SUBJECT MATTER JURISDICTION.
“Whenever it appears by suggestion of the parties or otherwise that the Court
lacks” subject matter jurisdiction over a claim, the Court must dismiss that claim. 51
In considering a Rule 12(b)(1) motion, the Court “need not accept [a plaintiff’s]
factual allegations as true and is free to consider facts not alleged in the complaint.”52
Accordingly, whereas the movant “need only show that the Court lacks
jurisdiction,”53 the non-movant bears the “far more demanding” burden of
“prov[ing]” the Court’s jurisdiction exists.54
III. DISCUSSION
A. MR. MIKKILINENI FAILS TO STATE CLAIMS AGAINST GODADDY.
As its principal authority in favor of dismissal, GoDaddy invokes the
“economic loss doctrine.” The economic loss doctrine prohibits recovery in
negligence where “the only losses suffered are economic in nature.”55 It is
51
Del. Super. Ct. Civ. R. 12(h)(3); see Webster v. Brosman, 2019 WL 5579489, at *1 (Del. Super.
Ct. Oct. 29, 2019) (“Superior Court Rule of Civil Procedure 12(h)(3) mandates the Court to dismiss
a claim if it appears from the record that the Court does not have jurisdiction over the claim.”); see
generally Del. Super. Ct. Civ. R. 12(b)(1).
52
Appriva S’holder Litig. Co., LLC v. EV3, Inc., 937 A.2d 1275, 1284 n.14 (Del. 2007) (internal
quotation marks omitted).
53
Airbase Carpet Mart, Inc. v. AYA Assocs., Inc., 2015 WL 9302894, at *2 (Del. Super. Ct. Dec.
15, 2015), aff’d, 2016 WL 4938890 (Del. Sept. 16, 2016).
54
Appriva, 937 A.2d at 1284 n.14 (internal quotation marks omitted).
55
Danforth v. Acorn Structures, Inc., 608 A.2d 1194, 1195 (Del. 1992); see also Crowell Corp.
v. Topkis Constr. Co., 280 A.2d 730, 732 (Del. Super. Ct. 1971) (“The great weight of authority
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“especially suited to cases where privity of contract”56 exists because an agreement
memorializing a business relationship presumptively affords adequate recourse
when that deal breaks down.57 Put differently, the doctrine prohibits parties to a
contract from suing in tort for the failure of a product or service to meet “bargained
for expectations.”58 Mr. Mikkilineni, though, has tried to do just that.
Mr. Mikkilineni contends that GoDaddy sold him a defective item. He alleges
that GoDaddy’s buggy server disrupted his commercial use of Maheswar.org,
resulting exclusively in profit-based harm to his intellectual property. At best, these
assertions signal a breach-of-contract claim potentially compensable under
GoDaddy’s browsable user agreement. But, because Mr. Mikkilineni has framed
his accusations in tort, the economic loss doctrine operates to deny him a two-for-
does not [] permit tort recovery [for pure economic loss] in the absence of physical injury to a
person or [a] dramatic incident such as [an] accident, [a] collapse or [an] explosion.”).
56
Danforth, 608 A.2d at 1200.
57
E.g., Envolve Pharm. Sols., Inc. v. Rite Aid Hdqtrs. Corp., 2021 WL 140919, at *8 (Del. Super.
Ct. Jan. 15, 2021) (“A contract creates reciprocal duties, and where those duties overlap preexisting
common-law tort duties, ‘it is presumed that the parties to the transaction have allocated the risk
of product nonperformance through the bargaining process,’ supplanting the common law of
torts.” (quoting Danforth, 608 A.2d at 1200)); see also Wolf v. Magness Constr. Co., 1994 WL
728831, at *4 (Del. Ch. Dec. 20, 1994) (“[T]he ‘economic loss doctrine’ [] prevents recovery in
tort for injuries that should be covered by warranties in contract law.” (citing Danforth, 608 A.2d
at 1198)); see generally Khushaim v. Tullow Inc., 2016 WL 3594752, at *4 (Del. Super. Ct. June
27, 2016) (“The driving principle for the [economic loss doctrine] is the notion that contract law
provides a better and more specific remedy than tort law.” (internal quotation marks omitted)).
58
Danforth, 608 A.2d at 1196 (internal quotation marks omitted).
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one.59 That is so despite Mr. Mikkilineni’s feeling that he has been victimized by
GoDaddy’s “power.” The economic loss doctrine applies indiscriminately to all
aggrieved buyers, including individual consumers with unequal bargaining power.60
Accordingly, Mr. Mikkilineni’s negligence claim against GoDaddy is
DISMISSED.61
All this in mind, Delaware courts, in their discretion, may look beyond a pro
se litigant’s uncounseled claim classifications to ensure his case is “fully and fairly
heard.”62 A court should not exalt the “formal defects” in pro se filings over their
“underlying substance.”63 Accordingly, the Court will here consider the breach-of-
59
Cf. Khushaim, 2016 WL 3594752, at *4 (observing, in the context of the economic loss
doctrine, that “a tort and contract claim might co-exist if the defendant breached a duty that is
independent of the duties imposed by the contract” (internal quotation marks omitted)).
60
See, e.g., Danforth, 608 A.2d at 1200–01 (rejecting an argument that the economic loss
doctrine should not apply to “individual consumers” because they have “inherently” less
bargaining power than “commercial buyers” and explaining further that the Generally Assembly
codified Article 2 of the Uniform Commercial Code, in part, to supersede tort law “as the complete
framework of the rights and remedies available to parties to a sale of goods contract”); see
generally DEL. CODE ANN. tit. 6, §§ 2–101 et seq. (2020).
61
Because Mr. Mikkilineni can’t bring his negligence claim, it follows that he can’t bring a
“gross” negligence claim either.
62
Durham v. Grapetree, LLC, 2014 WL 1980335, at *5 (Del. Ch. May 16, 2014) (internal
quotation marks omitted).
63
Sloan, 2008 WL 81513, at *7; see New Castle Cty. v. Kostyshyn, 2014 WL 1347745, at *5
(Del. Super. Ct. Apr. 4, 2014) (“Given the liberal standard for construing pro se pleadings,” the
Court may entertain claims fairly raised but not explicitly named in a pro se complaint. (citations
omitted)).
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contract claim it detected underneath Mr. Mikkilineni’s failed negligence claim.
That contract claim, however, likewise fails.
The elements of a breach-of-contract claim are “(1) the existence of a
contractual obligation; (2) a breach of that obligation; and (3) damages resulting
from the breach.”64 The only contractual obligation or breach that Mr. Mikkilineni
identifies is a submission form error on Maheswar.org for which he blames
GoDaddy’s abandoned “duty” to fix its “server-problem[s].”65 But, according to
Mr. Mikkilineni’s own allegations, GoDaddy, after investigating the problems raised
in his customer service calls, concluded that a third-party had hacked the site and
corrupted its hosting files.66 Further undermining a breach claim, Mr. Mikkilineni
admits that, at the time the glitching occurred, he had not been logging into his
website regularly or examining its own code functionality.67 In other words,
Mr. Mikkilineni’s allegation that GoDaddy—rather than someone or something
else—caused the errors is unsupported by any perceptible facts. Accordingly, his
64
Buck v. Viking Holding Mgmt. Co. LLC, 2021 WL 673459, at *3 (Del. Super. Ct. Feb. 22,
2021) (citing VLIW Tech., LLC v. Hewlett-Packard Co., 840 A.2d 606, 612 (Del. 2003)).
65
Compl. ¶ 3.1.
66
Id. ¶ 3.0(i).
67
Id. ¶ 3.0(b).
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conclusory breach-of-contract claim—and GoDaddy as a party—are
DISMISSED.68
B. MR. MIKKILINENI FAILS TO STATE CLAIMS AGAINST PAYPAL.
1. All the PayPal Claims Are Precluded.
Taking a procedural angle, PayPal argues that Mr. Mikkilineni’s complaints,
which simply resubmit the facts and claims he litigated in the Justice of the Peace
Court, are barred by the doctrines of res judicata and collateral estoppel. Both apply.
To invoke res judicata, the defendant must establish five elements:
(i) the original court had jurisdiction over the subject matter and the parties;
(ii) the parties to the original action were the same as those parties, or in
privity, in the case at bar;
(iii) the original cause of action or the issues decided was the same as the case
at bar;
(iv) the issues in the prior action must have been decided adversely to the
[claimant] in the case at bar; and
(v) the decree in the prior action was a final decree.69
“Res judicata exists to provide a definite end to litigation . . . and [to] promote
judicial economy.”70 It “serves to prevent a multiplicity of needless litigation” by
68
Because the Court has concluded that Mr. Mikkilineni has failed to state reasonably
conceivable claims against GoDaddy, the Court need not also consider GoDaddy’s forum selection
clause arguments.
69
RBC Cap. Mkts., LLC v. Educ. Loan Tr. IV, 87 A.3d 632, 643 (Del. 2014) (formatting added)
(internal quotation marks omitted).
70
LaPoint v. AmerisourceBergen Corp., 970 A.2d 185, 191 (Del. 2009) (citation omitted); e.g.,
Kossol v. Ashton Condo. Ass’n, Inc., 1994 WL 10861, at *2 (Del. Jan. 6, 1994) (Res judicata “is
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barring an unsuccessful litigant from reasserting claims in a second lawsuit that
“actually were decided” or “might have been raised” in a prior lawsuit involving the
same parties.71 To that end, an unsuccessful litigant cannot avoid res judicata by
“splitting” his claims.72 A previously-failed theory that has been restyled as a
different cause of action but rests on the same underlying facts will be deemed—and
barred—as one that could have been brought in the prior proceeding.73
Mr. Mikkilineni merely has reinitiated his Justice of the Peace case, satisfying
all res judicata’s elements and invoking its core policies. To begin, the Justice of
the Peace Court had personal and subject matter jurisdiction. Mr. Mikkilineni and
based on public policy requiring a definite end to litigation. It permits a litigant to press his claims
but once, and requires him to be bound by the determination of the forum he has chosen, so that
he may have one day in court but not two.”).
71
LaPoint, 970 A.2d at 191–92 (internal quotation marks omitted).
72
E.g., Maldonado v. Flynn, 417 A.2d 378, 382 (Del. Ch. 1980) (“The rule against claim splitting
is an aspect of . . . res judicata and is based on the belief that it is fairer to require a plaintiff to
present in one action all of his theories of recovery relating to a transaction, and all of the evidence
relating to those theories, than to permit him to prosecute overlapping or repetitive actions in
different courts or at different times.”); accord Kossol, 1994 WL 10861, at *2.
73
See, e.g., Kossol, 1994 WL 10861, at *2 (“Even if a substantive theory of recovery asserted in
a subsequent lawsuit is different from that presented in prior litigation, when the second action is
based on the same transaction as the first, the claim has been split and must be dismissed.”);
RESTATEMENT (SECOND) OF JUDGMENTS § 25 cmt. j (1982) (“Where the plaintiff may in one action
claim two or more remedies cumulatively rather than alternatively, all arising from the same
transaction, but seeks fewer than all of these remedies, and a judgment is entered that extinguishes
the claim under the rules of merger or bar, he is precluded from maintaining another action for the
other remedies.”); see also Town of Cheswold v. Cent. Del. Bus. Park, 188 A.3d 810, 817 (Del.
2018) (“Under res judicata, the claims asserted in the earlier action must be the same as those
asserted in the present action.”).
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PayPal—two Delaware citizens who are the original, same parties—litigated over
$4,000, a total that falls squarely within that court’s limited statutory jurisdiction.74
Mr. Mikkilineni lost on the merits; the Justice of the Peace Court issued a written
decision explaining why PayPal’s motion for a directed verdict was granted and
dismissed Mr. Mikkilineni’s claim with prejudice after he was granted a full
opportunity to make his case-in-chief. And Mr. Mikkilineni did not appeal any of
the J.P. Court’s rulings, keeping them long finalized.75
That leaves the “same claim” element. “In determining whether two claims
constitute the ‘same’ cause of action for res judicata purposes, Delaware follows a
transactional approach.”76 Under the transactional approach, res judicata bars
“litigation between the same parties if the claims in the later litigation arose from the
same transaction that forms the basis of the previous adjudication.”77 In turn,
determining whether two claims arise from the same transaction “requires pragmatic
74
See DEL. CODE ANN. tit. 10, § 9301(1) (2020) (empowering the Justice of the Peace Court to
adjudicate contract and tort claims that place less than $15,000 in controversy); see generally Jones
v. Hertz Corp., 2014 WL 3401606, at *5 (Del. Super. Ct. July 8, 2014) (“The Justice of the Peace
Court is a court of limited jurisdiction with authority derived solely from statute.” (internal
quotation marks omitted)).
75
See Carnevale v. Gaeger, 2012 WL 3642721, at *2–3 (Del. Super. Ct. July 31, 2012) (barring
inclusion in a later-filed Common Pleas Court case injuries alleged in a previously dismissed
Justice of the Peace Court case).
76
RBC Cap., 87 A.3d at 645.
77
Kossol, 1994 WL 10861, at *2.
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consideration,” weighing factors such as the relatedness of the claims “in time,
space, origin or motivation. . . .”78 Invariably, however, “[t]wo claims derived from
a common nucleus of operative facts arise from the same transaction.”79
As did his contract claim, Mr. Mikkilineni’s “negligence,” “fraud,” and “bad
faith” claims all arise from a common nucleus: his refund battle with PayPal in the
Justice of the Peace Court. Indeed, a side-by-side comparison of the instant and
original complaints reveals that his allegations in this Court are materially identical
to those he made to this Court’s sister.80 To the extent Mr. Mikkilineni seeks to
reintroduce the facts essential to a past, unsuccessful litigation in the guise of three,
renamed counts, those counts are precluded and dismissed as split.
On that, and alternatively, collateral estoppel would erase the “new” counts
too. Collateral estoppel applies when:
(i) [t]he issue previously decided is identical with the one presented in the
action in question[;]
(ii) the prior action has been finally adjudicated on the merits[;]
(iii) the party against whom the doctrine is invoked was a party or in privity
with a party to the prior adjudication[;] and
78
LaPoint, 970 A.2d at 193 (alteration and internal quotation marks omitted).
79
Id. (cleaned up).
80
Compare Exs. A & C to Def.’s Mot. to Dismiss (J.P. Compl.) with Compl. ¶¶ 2.4–2.5.
-21-
(iv) the party against whom the doctrine is raised had a full and fair
opportunity to litigate the issue in the prior action.81
“The doctrine of collateral estoppel ‘precludes a party from relitigating a fact issue
that has previously been litigated and decided in a prior action involving that
party.’”82 It “is designed to provide repose and put a definite end to litigation.”83
Like res judicata, another aim of issue preclusion is to prevent a civil litigant from
obtaining a second opinion on its previously-unsuccessful theories by deploying a
procedurally-infirm collateral attack as a surrogate for an untimely or forfeited direct
appeal.84 Collateral estoppel will thwart that attempt where “the same [factual] issue
was presented in both cases, the issue was litigated and decided in the first suit, and
the determination was essential to the prior judgment.”85
81
Betts v. Townsends, Inc., 765 A.2d 531, 535 (Del. 2000) (formatting added) (internal quotation
marks omitted).
82
Rogers v. Morgan, 208 A.3d 342, 346 (Del. 2019) (quoting Smith v. Guest, 16 A.3d 920, 934
(Del. 2011)).
83
Columbia Cas. Co. v. Playtex FP, Inc., 584 A.2d 1214, 1216 (Del. 1991); accord M.G.
Bancorp., Inc. v. Le Beau, 737 A.2d 513, 520 (Del. 1999).
84
Cf. Crothall v. Zimmerman, 94 A.3d 733, 737 n.11 (Del. 2014) (“It is settled that preclusion
should be defeated by the inability to secure appellate review. . . .” (emphasis and internal quotation
marks omitted)); see also M.G. Bancorp., 737 A.2d at 520 (“Pursuant to the doctrine of collateral
estoppel, if a court has decided an issue of fact necessary to its judgment, that decision precludes
relitigation of [that] issue in a suit on a different cause of action involving a party to the first case.”
(internal quotation marks omitted)).
85
Rogers, 208 A.3d at 346 (second alteration in original) (internal quotation marks omitted).
-22-
As explained, Mr. Mikkilineni just attempts to re-litigate the unchanged facts
that were necessary to the Justice of the Peace Court’s judgment.86 This, issue
preclusion, does not allow. Accordingly, his claims are collaterally estopped as well.
Finally, even if preclusion qualified as a technical mistake for which a pro se
litigant should not be faulted, Mr. Mikkilineni’s fraud and “bad faith” claims would
fail for independent, dispositive reasons.
2. The Fraud Claim Fails.
Fraud has five elements that must be pleaded with enhanced particularity:87
(i) a false representation, usually one of fact, made by the defendant;
(ii) the defendant’s knowledge or belief that the representation was
false, or was made with reckless indifference to the truth;
(iii) an intent to induce the plaintiff to act or refrain from acting;
(iv) the plaintiff’s action or inaction taken in justifiable reliance upon
the representation; and
(v) damage to the plaintiff as a result of such reliance.88
But not one of these elements is present here. For example, the Court searches
Mr. Mikkilineni’s complaints in vain for a false representation. Putting aside
86
See Gunn v. U.S. Bank Nat’l Ass’n, 2011 WL 6009676, at *1 (Del. Dec. 1, 2011) (affirming
lower court on both res judicata and collateral estoppel grounds where the facts of the two
litigations were unchanged); Betts, 765 A.2d at 734 (“Essentially, res judicata bars a court . . .
from reconsidering conclusions of law previously adjudicated while collateral estoppel bars
relitigation of issues of fact previously adjudicated.”).
87
See Del. Super. Ct. Civ. R. 9(b).
88
Stephenson v. Capano Dev., Inc., 462 A.2d 1069, 1074 (Del. 1983) (formatting added).
-23-
Mr. Mikkilineni’s characterizations of PayPal’s arguments as “fraudulent,” his
complaints suggest PayPal’s only “false representation” was its boast of an efficient
dispute-resolution process, or more aptly in his view, a process that resolves Mr.
Mikkilineni’s refund disputes the way he wishes. Mr. Mikkilineni’s personal
objection to PayPal’s incomplete disbursement of his refund and negative treatment
of his evidence does not amount to a colorable claim for common law fraud. And if
it somehow could, it here lacks the specificity imposed by Rule 9(b).89 Given this
absence of specificity, the only thing differentiating this claim from a breach-of-
contract claim is inclusion of the word “fraud.” Brought into sharper focus, Mr.
89
See Del. Super. Ct. Civ. R. 9(b) (“In all averments of fraud, negligence or mistake, the
circumstances constituting fraud, negligence or mistake shall be stated with particularity.”); see
also, e.g., Trenwick Am. Litig. Tr. v. Ernst & Young, L.L.P., 906 A.2d 168, 207–08 (Del. Ch. 2006)
(identifying the “circumstances” that must be pleaded with particularity, which include “the time,
place, and contents of the false representations” and “what that [alleged fraudster] gained from
making the representation”), aff’d sub nom., Trenwick Am. Litig. Tr. v. Billett, 2007 WL 2317768(Del. Aug. 14, 2007); see generally Avve, Inc. v. Upstack Techs., Inc., 2019 WL 1643752, at *5
(Del. Super. Ct. Apr. 12, 2019) (“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
gives the defendant fair notice of the claim. . . . Superior Court Civil Rule 9(b) deviates from this
general rule and imposes a heightened pleading standard for allegations of fraud.” (cleaned up)).
Rule 9(b)’s heightened pleading standard applies to all litigants, even pro se ones. E.g., Ward v.
Indian River Sch. Dist., 1991 WL 12100, at *1 (Del. Jan. 4, 1991) (affirming this Court’s dismissal
of a pro se litigant’s fraud claim for failure to meet Rule 9(b)’s demands); Maddox v. CitiMortg.,
Inc., 2014 WL 1155312, at *2 (Del. Super. Ct. Feb. 28, 2014) (“While Plaintiff has provided the
Court with greater factual detail for the allegations underlying his fraud claim, Plaintiff was
required to provide this level of detail in his original complaint under Civil Rule 9(b). . . . While
the Court may grant pro se litigants reasonable accommodations[,] . . . procedural requirements
will not be relaxed.” (citation omitted)); see also Noble v. QBE Ins. Co., 2018 WL 3689678, at *1
(Del. Super. Ct. July 30, 2018) (stating Rule 9(b)’s pleading standard and dismissing complaint as
frivolous, in part, because a court “is instructed to dismiss a complaint where ‘even a pro se litigant,
acting with due diligence, should have found well settled law disposing of the issue(s) raised’”
(quoting DEL. CODE ANN. tit. 10, § 8803(b) (2020))).
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Mikkilineni’s fraud claim, in substance90 and in relief sought,91 truly is a
bootstrapped breach-of-contract claim. A litigant cannot use the generic standard
for pleading breach to reach the heightened demand required by a Rule 9(b) claim.92
Accordingly, Mr. Mikkilineni’s attempts to do so are DISMISSED.
3. The Implied Covenant Claim Fails.
“Bad faith” is not a cause of action. Given Mr. Mikkilineni’s neighboring
contract-based allegations, the Court assumes he meant to accuse PayPal of
breaching the implied covenant of good faith and fair dealing. The implied covenant
does “inhere[] in all contracts. . . .”93 But the implied covenant can’t be used “to
vary a contract’s express terms. . . .”94 In other words, a party summoning the
90
E.g., EZLinks Golf, LLC v. PCMS Datafit, Inc., 2017 WL 1312209, at *5 (Del. Super. Ct. Mar.
13, 2017) (“[U]nder Delaware law, a plaintiff cannot bootstrap a claim of breach of contract into
a claim of fraud merely by alleging that a contracting party never intended to perform its
obligations. Nor can a plaintiff devise a claim for fraud simply by adding [words of fraud] to a
complaint.” (internal quotation marks and citations omitted)).
91
E.g., inVentiv Health Clinical, LLC v. Odonate Therapeutics, Inc., 2021 WL 252823, at *8
(Del. Super. Ct. Jan. 26, 2021) (“Under Delaware’s pleading standard[s], the damages [allegedly
caused by fraud] may not simply rehash the damages allegedly caused by the breach of contract.”
(internal quotation marks omitted)).
92
See, e.g., Firmenich Inc. v. Nat. Flavors, Inc., 2019 WL 6522055, at *3 (Del. Super. Ct. Oct.
29, 2019) (“[A] fraud claim only survives if it is based on some conduct distinct from that
constituting a breach of contract. . . . For both a breach-of-contract claim and a tort claim to coexist
in a single action, the plaintiff must allege that the defendant breached a duty that is independent
of the duties imposed by the contract.” (cleaned up)).
93
Dieckman v. Regency GP LP, 155 A.3d 358, 367 (Del. 2017).
94
Buck, 2021 WL 673459, at *5.
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implied covenant must reveal a “gap” in the subject agreement.95 Mr. Mikkilineni,
however, has not pleaded a gap. Instead, he has (again) “repackage[d]”96 his failed
breach-of-contract allegations97 that rested on the express dispute-resolution
provisions in PayPal’s user agreement.98 A “bad faith” breach of the agreement’s
express terms is still a breach of the agreement’s express terms.99 The implied
covenant claim is thus impermissibly duplicative.100
95
E.g., Nemec v. Shrader, 991 A.2d 1120, 1125–26 (Del. 2010); Dunlap v. State Farm Fire &
Cas. Co., 878 A.2d 434, 441 (Del. 2005).
96
Buck, 2021 WL 673459, at *5.
97
The economic loss doctrine undercuts Mr. Mikkilineni’s lurking breach-of-contract claim for
the same reasons it undercut his claims against GoDaddy.
98
See ASB Allegiance Real Est. Fund v. Scion Breckenridge Managing Member, LLC, 50 A.3d
434, 444–45 (Del. Ch. 2012) (“Notwithstanding the covenant’s potentially misleading moniker
and decisional references to a culpable mental state, a claim for breach of the implied covenant is
a contract claim, requires proof of breach-of-contract elements, and yields contract remedies.”),
rev’d on other grounds, 68 A.3d 665 (Del. 2013); see also Nemec, 991 A.2d at 1125–26 (“[O]ne
generally cannot base a claim for breach of the implied covenant on conduct authorized by the
agreement.” (alteration in original) (internal quotation marks omitted)).
99
See Kuroda v. SPJS Holdings, Inc., 971 A.2d 872, 888 (Del. Ch. 2009) (“The implied covenant
cannot be invoked to override the express terms of the contract. . . . General allegations of bad
faith conduct are not sufficient. Rather, the plaintiff must allege a specific implied contractual
obligation and allege how the violation of that obligation denied the plaintiff the fruits of the
contract. Consistent with its narrow purpose, the implied covenant is only rarely invoked
successfully.” (emphasis added) (citations omitted)).
100
E.g., Edinburgh Holdings, Inc. v. Educ. Affiliates, Inc., 2018 WL 2727542, at *9 (Del. Ch.
June 6, 2018) (“[I]f the contract at issue expressly addresses a particular matter, an implied
covenant claim respecting that matter is duplicative and not viable.”).
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Contrary to Mr. Mikkilineni’s belief, the implied covenant’s “good faith”
component “does not envision loyalty to [a] contractual counterparty. . . .”101
Despite its name, “the covenant does not establish a free-floating requirement that a
party act in some morally commendable sense.”102 And it does not “necessarily
require that a party have acted in subjective good faith.103 It only exists to deter
arbitrary or unreasonable conduct that would spoil the fruits of a bargain.104 Nothing
in the complaints, however, indicates that PayPal acted arbitrarily or unreasonably
in resolving Mr. Mikkilineni’s refund dispute. Based on the complaints, it appears
to have applied its adjudicatory discretion neutrally, simply finding that Spark (the
seemingly more appropriate target of these allegations) had the better case.105
Mr. Mikkilineni’s criticism of the outcome as unjust does not poke a hole in the
101
Gerber v. Enter. Prods. Holdings, LLC, 67 A.3d 400, 419 (Del. 2013) (emphasis and internal
quotation marks omitted), overruled in part on other grounds by Winshall v. Viacom Int’l, Inc., 76
A.3d 808, 815 n.13 (Del. 2013).
Allen v. El Paso Pipeline GP Co., L.L.C., 113 A.3d 167, 182–83 (Del. Ch. 2014), aff’d, 2015
102
WL 803053 (Del. Feb. 26, 2015).
103
Id. at 183.
104
Dieckman, 155 A.3d at 367.
105
But see, e.g., Airborne Health, Inc. v. Squid Soap LP, 984 A.2d 126, 146–47 (Del. Ch. 2009)
(“When a contract confers discretion on one party, the implied covenant requires that the discretion
be used reasonably and in good faith.”); but see also Gerber, 67 A.3d at 419 (“[W]hat is arbitrary
or unreasonable—or conversely[,] reasonable—depends on the parties’ original contractual
expectations, not a free-floating duty applied at the time of the wrong.” (internal quotation marks
omitted)).
-27-
agreement that must be plugged with the implied covenant.106 Accordingly, the “bad
faith” claim—and PayPal as a party—are DISMISSED.
C. THIS COURT LACKS JURISDICTION OVER MR. MIKKILINENI’S CLAIMS
AGAINST UPWORK, WHICH OTHERWISE FAIL ON THE MERITS.
1. Mr. Mikkilineni Agreed to Arbitrate His Claims.
Though it studiously recounts the facts of their Justice of the Peace litigation,
Upwork does not argue that Mr. Mikkilineni faces procedural hurdles to challenging
his duty to arbitrate. Instead, Upwork revisits the arbitration issue on the merits.
That being so, the Court assumes arguendo that Mr. Mikkilineni is not precluded
procedurally from re-litigating his claims. Nevertheless, Mr. Mikkilineni is
precluded contractually from re-litigating them. His case lies within the exclusive
jurisdiction of a California arbitrator.
“The public policy of Delaware favors arbitration.”107 Because of that “strong
public policy,” the Court will grant a Rule 12(b)(1) dismissal motion whenever the
106
See Oxbow Carbon & Mins. Holdings, Inc. v. Crestview-Oxbow Acquisition, LLC, 202 A.3d
482, 507 (Del. 2019) (“Delaware’s implied duty of good faith and fair dealing is not an equitable
remedy for rebalancing economic interests after events that could have been anticipated, but were
not, that later adversely affected one party to the contract. Rather, the implied covenant is an
extraordinary legal remedy.” (internal quotation marks and citations omitted)); see also Allen, 113
A.3d at 183 (“If a contractual gap exists, then the court must determine whether the implied
covenant should be used to supply a term to fill the gap. Not all gaps should be filled.”).
107
Kuhn v. Diamond State Port Corp., 990 A.2d 393, 396 (Del. 2010).
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“dispute is one that, on its face, falls within the arbitration clause of the contract.”108
Indeed, the sole question a court confronted with a valid arbitration clause should
answer is “whether the parties should be arbitrating at all. . . .”109 To determine an
arbitration clause’s validity, the Court starts with the contract’s text.110 An
arbitration clause is presumptively valid unless it is ambiguous or does not clearly
indicate an intention to arbitrate.111 Doubt as to the parties’ intentions, however,
ordinarily is resolved in favor of arbitration.112 And if the enforceable arbitration
clause is “broad in scope,” the Court “will defer to arbitration on any issues that
touch on contract rights or contract performance” “so far as the series of obligations
set forth in the underlying agreement.”113
Section 14.1 (the “Arbitration Provision”) of Upwork’s user agreement
clearly delimits the scope of arbitrability to all contract-linked claims.
108
NAMA Holdings, LLC v. Related World Mkt. Ctr., LLC, 922 A.2d 417, 429 (Del. Ch. 2007)
(quoting SBC Interactive, Inc. v. Corp. Media Partners, 714 A.2d 758, 761 (Del. 1998)).
109
Viacom Int’l, Inc. v. Winshall, 72 A.3d 78, 83 (Del. 2013) (internal quotation marks omitted).
110
See Parfi Holding AB v. Mirror Image Internet, Inc., 817 A.2d 149, 156 (Del. 2002) (“The
policy that favors alternate dispute resolution mechanisms, such as arbitration, does not trump
basic principles of contract interpretation.”).
111
Kuhn, 990 A.2d at 397; see also James & Jackson, LLC v. Willie Gary, LLC, 906 A.2d 76, 78
(Del. 2006) (“[A] party cannot be required to submit to arbitration any dispute [that] he has not
agreed so to submit.” (internal quotation marks omitted)).
112
Parfi, 817 A.2d at 156.
113
Id. at 155–56.
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Claims covered by [the] Arbitration Provision include, but are not
limited to, all claims, disputes or controversies arising out of or relating
to this Agreement. . . .114
Given the Arbitration Provision’s breadth, the parties plainly intended to submit all
disputes “touching on” Upwork’s contractual services to arbitration.115 A party who
did not intend that result could have opted-out; the Arbitration Provision is neither
compulsory nor a mandatory condition to contracting with Upwork.116
Mr. Mikkilineni, though, did not opt-out. To the contrary (and despite his adverse
averments) he accepted the entire user agreement.117 And so, Mr. Mikkilineni’s
claims—which all revolve around Upwork’s user agreement—fall squarely within
the Arbitration Provision, depriving this Court of subject matter jurisdiction. Those
claims against Upwork are accordingly DISMISSED.
To the extent Mr. Mikkilineni is challenging his “opting-in,” he misses the
mark. An otherwise clear intent to arbitrate will not be invalidated merely because
a party did not negotiate the arbitration provision or otherwise participate in its
114
Ex. 1 (D.I. 108) (User Agreement).
115
Parfi, 817 A.2d at 155; see also Salamone v. Gorman, 106 A.3d 354, 368 (Del. 2014)
(“Contract terms themselves will be controlling when they establish the parties’ common meaning
so that a reasonable person in the position of either party would have no expectations inconsistent
with the contract language.” (internal quotation marks omitted)).
116
Ex. 1 § 14.4.4.
117
Unsworn Aff. of Anh (Amy) Le, Upwork Legal Program Coordinator ¶¶ 6–8 (D.I. 108); Ex. 1
(D.I. 108) (Mr. Mikkilineni’s Electronic Acceptance).
-30-
drafting.118 That is because arbitration clauses are governed by familiar principles
of contract formation.119 A contract forms when “there is a manifestation of mutual
assent to the exchange and a consideration.”120 And in Delaware, “overt
manifestation of assent—not subjective intent—controls the formation of a
contract.”121 So, Mr. Mikkilineni’s “after-the-fact professed subjective intent” that
he didn’t actually want to arbitrate is irrelevant.122 Objectively, he consented to
arbitration, and he hasn’t marshaled any evidence suggesting that he’d been coerced.
Moreover, to the extent Mr. Mikkilineni believes he has defenses to arbitrating
(e.g., Upwork’s “delay”), the Court can’t assess them. A delay or waiver defense to
118
See, e.g., AlixPartners v. Mori, 2019 WL 6327325, at *11 (Del. Ch. Nov. 29, 2019);
Hornberger Mgmt. Co. v. Haws & Tingle Gen. Contractors, Inc., 768 A.2d 983, 987 (Del. Super.
Ct. 2000). AlixPartners and Hornberger involved forum selection clauses, but Delaware law
“treats forum selection clauses ‘in the same spirit’ as arbitration clauses; thus, the same general
principles apply in determining the scope and level of deference to be given either kind of clause.”
ASDS Holdings, LLC v. Richard J. Malouf 2008 All Smiles Grantor Retained Annuity Tr., 2011
WL 4552508, at *4 (Del. Ch. Sept. 14, 2011); see also Nat’l Indus. Grp. (Holding) v. Carlyle Inv.
Mgmt. L.L.C., 67 A.3d 373, 384 n.41 (Del. 2013) (“[A]n arbitration clause is, in effect, a
specialized kind of forum-selection clause.” (internal quotation marks omitted)).
119
E.g., Chemours Co. v. DowDuPont Inc., 2020 WL 1527783, at *9 (Del. Ch. Mar. 30, 2020)
(“In considering the agreement to arbitrate, general state law contract principles, and not any
special rules separate to arbitration agreements, must apply.”), aff’d, 2020 WL 7378829 (Del. Dec.
15, 2020).
120
Eagle Force Holdings, LLC v. Campbell, 187 A.2d 1209, 1212 (Del. 2018) (internal quotation
marks omitted).
121
Chemours Co., 2020 WL 1527783, at *9 (quoting Eagle Force, 187 A.3d at 1229).
122
Chemours Co., 2020 WL 1527783, at *9 (internal quotation marks omitted).
-31-
arbitration is a “procedural” question reserved for the arbitrator.123 The Court’s only
task here is to determine whether Mr. Mikkilineni’s claims fall within the plain
language of the Arbitration Provision. They do. Wading through every nit cursorily
picked by Mr. Mikkilineni in his disagreements with the way Upwork undertook its
mediation efforts would, at minimum, counteract the efficiency-based rationale
undergirding Delaware’s statutorily-enshrined preference for enforcing arbitration
clauses as written.124
2. Absent An Arbitration Clause, the Claims Would Fail on the Merits.
Even if the Court humored Mr. Mikkilineni’s insistence that he was totally
unaware of, and therefore involuntarily opted-into, the Arbitration Provision,125 it
would find his claims fail on the merits largely for the same reasons they failed
above. To reiterate, the economic loss doctrine blocks Mr. Mikkilineni’s pursuit of
a negligence claim, as none of his “damages” would be extra-contractual. More
importantly, he has not pleaded a reasonably conceivable breach-of-contract claim
123
Viacom Int’l, Inc. v. Winshall, 2012 WL 3249620, at *12 (Del. Ch. Aug. 9, 2012), aff'd, 72
A.3d at 82; accord CLP Toxicology, Inc. v. Casla Bio Holdings LLC, 2021 WL 2588905, at *9
(Del. Ch. June 14, 2021).
124
See DEL. CODE ANN. tit. 10, §§ 5702(a), (c) (2020).
125
In most contexts, there is good reason to question such a protestation. See, e.g., Elia v. Hertrich
Fam. of Auto. Dealerships, Inc., 2014 WL 5410723, at *1 (Del. Oct. 23, 2014) (finding arbitration
clause valid where party did not sign it but “proceeded under” the contract anyway); cf. UBEO
Holdings, LLC v. Drakulic, 2021 WL 1716966, at *11–12 (Del. Ch. Apr. 30, 2021) (finding forum
selection clause invalid where party did not read the agreement before signing it and the other
party took steps to “excerpt” the forum selection clause out of the agreement before closing).
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to begin with; he’s omitted any discussion of a duty Upwork shirked. Next, he has
not pleaded any conduct resembling fraud; his colloquial use of the word “false” in
replying to his adversaries’ legal contentions and exhibits doesn’t suffice. Last, he
doesn’t propose a gap in the parties’ agreements that the implied covenant must fill.
The only claim unique to Upwork is Mr. Mikkilineni’s “tort or wrongful
interference with contract” theory. But it too is fundamentally flawed. To state a
tortious interference with contract claim, a plaintiff must allege, among other things,
that the defendant took an intentional and unjustified act that was a significant factor
in causing the underlying breach.126 Mr. Mikkilineni, though, mistakes cause and
effect. He has alleged that the freelancer breached the agreement those two alone
had before Upwork entered the scene.127 By consequence, Upwork’s supposed
failure to mitigate that loss arose after Mr. Mikkilineni informed it of the freelancer’s
misappropriations. Taken in tandem, it is not reasonably conceivable that Upwork
caused the freelancer’s alleged breach.128 This claim—and Upwork as a party—are
DISMISSED.
126
Bhole, Inc. v. Shore Invs., Inc., 67 A.3d 444, 453 (Del. 2013).
127
E.g., Compl. ¶¶ 5.0(d)–(e).
128
And, even if Upwork could (somehow) be found to have breached an obligation under the
agreement between Mr. Mikkilineni and the freelancer alone, a tortious interference claim still
would fail. “It is rudimentary that a party to a contract cannot be liable both for breach of that
contract and for inducing that breach.” Shearin v. E.F. Hutton Grp., Inc., 652 A.2d 578, 590 (Del.
Ch. 1994).
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IV. CONCLUSION
Mr. Mikkilineni has no reasonably conceivable, procedurally-allowed, or
contractually-permitted claims against PayPal, GoDaddy, or Upwork. Their
motions are GRANTED and all the allegations against them are DISMISSED
WITH PREJUDICE.
IT IS SO ORDERED.
_________________________
Paul R. Wallace, Judge
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