TIBCO Software, Inc. v. nThrive Revenue Systems, LLC ( 2019 )

IN THE SUPERIOR COURT OF THE STATE OF DELAWARE
TIBCO SOFTWARE, INC.,
Plaintiff, C.A. No. N18C-08-072 MAA
Vv.
NTHRIVE REVENUE SYSTEMS,
LLC,
Nee Nee Nee Nee ee ee” ee” ee ee Se”
Defendant.
Submitted: September 10, 2019
Decided: November 21, 2019
Upon Defendant nThrive Revenue Systems, LLC’s Motion for Summary Judgment:
Denied
MEMORANDUM OPINION
Josiah R. Wolcott, Esquire, of CONNOLLY GALLAGHER, LLP, Newark,
Delaware, Attorney for Plaintiff.
Chad S.C. Stover, Esquire, of BARNES & THORNBURG, LLP, Wilmington,
Delaware, Attorney for Defendant.
Adams, J.
This case involves the interpretation of a contract between plaintiff TIBCO
Software, Inc. (“TIBCO”) and MedAssets Net Revenue Systems, LLC
(“MedAssets”) for information technology products, services and support.
Defendant nThrive Revenue Systems, LLC (“nThrive”) is the successor in interest
to MedAssets. At the heart of this case is whether nThrive had the authority to
terminate certain maintenance services pursuant to the termination provisions of
the agreement at issue. According to nThrive, this question can be answered in the
affirmative because of the September 27, 2016 Termination Letter, which nThrive
claims validly terminated all future obligations to purchase maintenance services.
The answer to this question, however, is not so simple. For the reasons stated
herein, the Court finds that genuine issues of material fact exist on whether
nThrive had the authority to terminate and the meaning of the termination
provisions, thereby precluding summary judgment. nThrive’s motion for summary
judgment is, therefore, denied.
FACTS AND PROCEDURAL BACKGROUND
The following facts are drawn from the pleadings and the record currently
before the Court, viewed in the light most favorable to the non-moving party. !
On May 25, 2010, TIBCO and MedAssets entered into a contract under
which MedAssets purchased information technology products, services and
support under the MedAssets Order Form and Services Agreement (“MedAssets
Order Form” or “Agreement”).? The Agreement continued from 2010 through
2016, although the MedAssets Order Form “was amended from time to time” and
the two companies executed additional Work Orders.? Those additional Work
Orders were incorporated into the MedAssets Order Form and developed into the
MedAssets Legacy Agreements.*
TIBCO sent an invoice to MedAssets dated December 11, 2015 for Silver
Level Maintenance under the MedAssets Order Form in the amount of
! See GMG Capital Investments v. Athenian Venture Partners, 36 A.3d 776, 779
(Del. 2012) (citing State Farm Mut. Auto. Ins. Co. v. Patterson, 7 A.3d 454, 456
(Del. 2010)).
* Compl. Ff 4-5; Def. nThrive Revenue Systems, LLC’s Opening Br. in Supp. of
Mot. for Summ. J. 2.
3 Compl. { 6; Compl. Ex. B.
* Ans. Br. of Pl. TIBCO Software Inc. in Resp. to Def. nThrive Revenue Systems,
LLC’s Mot. for Summ. J.3-4; Compl. Ex. B.
3-
$318,377.95 for the annual period of January 1, 2016 to December 31, 2016.° This
invoice was paid.°®
In 2016, MedAssets underwent a merger that resulted in the formation of
nThrive.’ On January 27, 2016, Pamplona Capital Management LLP
(“Pamplona”) purchased MedAssets, Inc. and all of its subsidiaries and affiliates.®
This included The Broadlane Group and MedAssets Net Revenue Systems, LLC.’
Pamplona then sold the spend and clinical resource management segment, which
included The Broadlane Group, to Vizient, Inc.!? Pamplona retained ownership of
MedAssets Net Revenue Systems, LLC."!
Leading up to and shortly after Pamplona’s purchase of MedAssets, there
were communications between MedAssets employees regarding the effect of these
transactions on the companies’ continued access to the TIBCO licenses that were
provided under the MedAssets Order Form.'* Specifically, these communications
discussed the need to adjust the MedAssets Order Form to reflect Pamplona and
> Answer Ex. 2.
6 Answer § 6; Def. nThrive Revenue Systems, LLC’s Suppl. Br. in Supp. of Mot.
for Summ. J. Ex. 6 at 52.
7 Def.’s Opening Br. in Supp. of Mot. for Summ. J. 1.
8 Def.’s Suppl. Br. Ex. 6 at 33, Ex. 15.
? Compl. Ex. B.
10 Compl. Ex. B.
'! Compl. Ex. B.
'2 Def.’s Suppl. Br. Ex. 15.
Vizient as “customers.”!? Although a letter to TIBCO was drafted requesting this
'4 it is unclear whether the letter was ever sent. In any event, TIBCO
change,
claims it denied the request.!°
Prior to Pamplona’s purchase of MedAssets, Inc. and its subsidiaries, RCM
Holdco, Inc. was the sole member of MedAssets.!© On July 7, 2016, a certificate
of amendment!’ and certificate of merger!® were filed with the Delaware Secretary
of State, indicating the merger of RCM Holdco, Inc. into nThrive, Inc. nThrive
became the sole member of MedAssets as a result of the merger.’ nThrive asserts
that this “rebranding” was merely a “name change” and that MedAssets did not
change its corporate structure after the purchase by Pamplona.”’ TIBCO, however,
asserts that a corporate restructuring occurred and resulted in a new entity.”!
On September 23, 2016, after a conversation between individuals from
nThrive and TIBCO, TIBCO sent a letter to nThrive warning that nThrive was
'3 Def.’s Suppl. Br. Ex. 15 at TIB0000069.
4 Def.’s Suppl. Br. Ex. 15 at TIB0000071-72.
15 Suppl. Br. of Pl. TIBCO Software Inc. in Opp’n to Def. nThrive Revenue
Systems, LLC’s Mot. for Summ. J. 4.
‘6s Compl. Ex. B.
” Aff. of Jennie Do Supp. Def.’s Suppl. Br. in Supp. of Mot. for Summ. J. at Ex. 9.
‘8 Transmittal Aff. of Josiah R. Wolcott in Supp. of Suppl. Br. of Pl. TIBCO
Software, Inc. in Resp. to Def. nThrive Revenue Systems, LLC’s Mot. for Summ.
J. Ex. D.
'? Compl. Ex. B.
»” Answer § 2; Def.’s Suppl. Br. Ex. 12 at 34.
21 P].’s Ans. Br. to Def.’s Mot. for Summ. J. 4.
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“currently using TIBCO Software that has not been contractually assigned
following a sequence of extraordinary corporate events involving MedAssets Net
Revenue Systems that resulted in the renamed entity of nThrive.”””
On September 27, 2016, nThrive sent a letter (“Termination Letter”) to
TIBCO stating that nThrive would not renew its order of Silver Level Maintenance
from TIBCO at the end of the 2016 period.”
nThrive’s Termination Letter implicates three provisions of the Agreement.
First, the Extraordinary Corporate Event clause provides:
To the extent Licensee or its successors or assigns enters into an
Extraordinary Corporate Event after the Order Form Effective Date,
this Agreement, as amended, shall not apply to those additional users,
divisions or entities, which were added to Licensee’s organization as a
result of the Extraordinary Corporate Event until those additional
users, divisions or entities are added to this Agreement by way of a
written amendment signed by duly authorized officers of Licensor and
Licensee.”*
“Extraordinary Corporate Event” is defined in the Product Restrictions and
Definitions as:
a corporate transaction which results in Licensee acquiring, being
acquired by, merged, or otherwise combined with another entity or
into another entity’s legal or corporate structure (including an
acquisition of all or substantially all of the assets of another entity)
22 Wolcott Transmittal Aff. in Supp. of Pl.’s Suppl. Br. Ex. G.
3 Answer 6.
4 Compl. Ex. A § 7.1.
which, prior to the corporate transaction, was not part of the Licensee
or its legal or corporate structure.”°
Second, the assignments provision states:
Except for an assignment, in whole or part, by Licensor to a wholly
owned subsidiary, neither party may assign this Agreement and/or any
of its rights and/or obligations without the prior written consent of the
other party (which shall not to be unreasonably withheld). Any such
attempted assignment shall be void. For the purposes of the
foregoing, a change in control of Licensee is deemed to cause or
attempt to cause an assignment of this Agreement and shall require
Licensor’s prior written consent.?¢
Finally, the termination provision states, in relevant part, that “[e]ither party may
terminate [...] Maintenance, upon prior written notice at least sixty (60) days prior
to the end of any annual Maintenance period.””’
nThrive asserts that it had the right to terminate Silver Level Maintenance by
providing written notice at least sixty (60) days prior to the end of the Maintenance
period, pursuant to § 19.1(c) of the Agreement.”®
nThrive argues that, because it
sent the Termination Letter in accordance with § 19.1(c), it was not responsible for
continued payments for Silver Level Maintenance beyond December 31, 2016.”
TIBCO counters that nThrive did not have the authority to terminate this service
5 Compl. Ex. A, Product Restrictions and Definitions.
26 Compl. Ex. A § 21.5. “Change in control” is not defined within the MedAssets
Order Form and Services Agreement nor in the Product Restrictions and
Definitions.
27 Compl. Ex. A § 19.1.
28 Answer 6.
29 Answer 6.
and that the Termination Letter was ineffective.*° TIBCO bases this argument on
the triggering of the Extraordinary Corporate Event clause and the assignments
provision of the Services Agreement, as well as its assertion that nThrive is a
separate entity from MedAssets and was, therefore, not a party to the MedAssets
Order Form.?!
On November 9—10, 2016, TIBCO employees exchanged emails regarding
MedAssets’ status under the MedAssets Order Form.*? These emails suggest some
awareness by TIBCO of nThrive’s attempt to terminate Silver Level Maintenance,
although they also express an expectation that nThrive would ultimately renew
Silver Level Maintenance.
On November 10, 2016, TIBCO and nThrive executed the nThrive Order
Form under which nThrive agreed to “assume all of MedAssets’ rights, duties, and
obligations existing under the MedAssets Legacy Agreements,” effective
November 4, 2016.24 The nThrive Order Form also states that “Customer
[nThrive] acknowledges that the Maintenance Fees for the Software under this
Order Form are in addition to the existing Maintenance Fees that are due and
30 P].’s Ans. Br. to Def.’s Mot. for Summ. J. 8—9.
31 P].?s Ans. Br. to Def.’s Mot. for Summ. J. 8-9.
32 Def.’s Suppl. Br. Ex. 14.
3 Def.’s Suppl. Br. Ex. 14.
34 Compl. 4 7; Answer § 8; Def.’s Opening Br. in Supp. of Mot. for Summ. J. 5.
8.
payable for Software licensed under previous agreement(s).”*° TIBCO asserts that,
under this agreement, nThrive agreed to assume all of MedAssets’ obligations to
secure and pay for the same Silver Level Maintenance for the software license that
MedAssets had chosen under the MedAssets Order Form.°*°
TIBCO sent an invoice to nThrive on November 14, 2016 for $334,296.84
for Silver Level Maintenance for the annual period of January 1, 2017 through
December 31, 2017.7’ TIBCO sent an invoice for Silver Level Maintenance again
the following year, on December 12, 2017, for the annual period of January 1,
2018 through December 31, 2018 in the amount of $351,011.69.° nThrive did not
pay either invoice.°?
Procedural Posture
nThrive filed its original Motion for Summary Judgment on October 10,
2018, prior to any discovery by the parties. TIBCO filed its Answering Brief on
November 9, 2018. On January 7, 2019, the Court ordered “a period of limited and
focused fact discovery, followed by limited supplemental briefing.”4° On April 15,
2019, the Court granted in part TIBCO’s Motion to Compel, to the extent that it
35 Compl. Ex. B at 5 (emphasis added).
36 Pl.’s Ans. Br. to Def.’s Mot. for Summ. J. 7.
37 Compl. § 11.
38 Compl. ¥ 11.
39 Compl. § 14.
40 So Ordered Am. Stip. and Prop. Sched. Order, Apr. 5, 2019.
_9.
sought production of “final, executed transactional documents with respect to: (1)
Pamplona’s purchase of MedAssets, Inc.; and (ii) the merger between RCM
Holdco, Inc. and nThrive, Inc.”
nThrive filed its Supplemental Brief in Support of its Motion for Summary
Judgment on May 15, 2019, following limited discovery. nThrive included the
following additional arguments in its Supplemental Brief: (i) that TIBCO’s
interpretation of the contract would lead to the “absurd” result of nThrive being
simultaneously responsible for the obligations under the MedAssets Order Form
while lacking the authority to terminate the agreement; and (i1) that, should only
MedAssets be found to have had authority to terminate the contract, nThrive’s
termination was still valid because it was acting as an agent of MedAssets.”
TIBCO filed its Supplemental Brief in response on May 29, 2019 and nThrive filed
its Supplemental Reply on June 12, 2019. The Court heard oral argument on
September 10, 2019.
“1 Mot. to Compel Order.
” Def.’s Suppl. Br. 8-9.
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ANALYSIS
There is no absolute right to summary judgment.8 Summary judgment is a
“harsh remedy” that “must be cautiously invoked.” Under Superior Court Civil
Rule 56(c), summary judgment is appropriate “if the pleadings, depositions,
answers to interrogatories, and admissions on file, together with the affidavits, if
any, show that there is no genuine issue as to any material fact and that the moving
party is entitled to a judgment as a matter of law.”*° “In evaluating the summary
judgment record, a trial court shall not weigh the evidence or resolve conflicts
presented by pretrial discovery.”’*°
The Court must view the facts in the light most favorable to the non-moving
party.‘” The Court should not grant summary judgment “if it seems desirable to
inquire more thoroughly into the facts in order to clarify the application of law to
9948
the circumstances. The Court “maintains the discretion to deny summary
3 AeroGlobal Capital Mgmt., LLC. v. Cirrus Indus., Inc., 871 A.2d 428, 443 (Del.
2005) (citing Cross v. Hair, 258 A.2d 277, 278 (Del.1969)).
44 GMG, 36 A.3d at 783 (citing Williams v. Geier, 671 A.2d 1368, 1389 (Del.
1996)).
45 Del. Super. Ct. Civ. R. P. 56(c).
46 AeroGlobal, 871 A.2d at 444 (citing Telxon Corp. v. Meyerson, 802 A.2d 257,
262 (Del. 2002)).
7 GMG, 36 A.3d at 779 (citing State Farm Mut. Auto. Ins. Co. v. Patterson, 7 A.3d
454, 456 (Del. 2010)).
48 Geier, 671 A.2d at 1388-89 (Hartnett, J. and Horsery, J. dissenting) (citing
Ebersole v. Lowengrub, 180 A.2d 467 (Del. 1962)).
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judgment if it decides that a more thorough development of the record would
clarify the law or its application.”
A genuine issue as to a material fact exists when, in the context of a contract
dispute, reasonable minds could differ as to the contract’s meaning.°? Where a
contract is ambiguous or silent on an issue, the factfinder will examine the
extrinsic evidence presented by the parties to construe the contract or determine the
parties’ intent.°! If a contract is ambiguous, “the resolution of the ambiguity
becomes a trial issue for the jury” and summary judgment is inappropriate.
I. A factual dispute exists regarding nThrive’s authority to terminate the
MedAssets Order Form.
Central to this motion for summary judgment is the issue of whether nThrive
had the authority to terminate the MedAssets Order Form and Services
B.A.S.S. Group, LLC v. Coastal Supply Co., Inc., 2009 WL 1743730, at *4 (Del.
Ch. June 19, 2009) (quoting Tunnel! v. Stokley, 2006 WL 452780, at *2 (Del. Ch.
Feb.15, 2006).
°° GMG, 36 A.3d at 783.
1 Norton v. K-Sea Transp. P’rs L.P., 67 A.3d 354, 360 (Del. 2013); Simon-Mills,
Il, LLC. v. Kan Am USA XVI Ltd. P’ship, 2017 WL 1191061, at *17 (citation
omitted) (Del. Ch. Mar. 30, 2017).
°2 Khan v. Delaware State Univ., 2017 WL 815257 (Del. Super. Feb. 28, 2017)
(citing GMG, 36 A.3d at 783); Lawrence M. Solan, Pernicious Ambiguity in
Contracts & Statutes, 79 Chi—Kent L.Rev. 859, 861-62
(2004); United Rentals, Inc. v. RAM Hldgs., Inc., 937 A.2d 810, 841-
42 (Del. Ch. 2007)).
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Agreement.°? TIBCO asserts that, because nThrive is a separate entity from
MedaAssets, nThrive was not a party to the MedAssets Order Form and, therefore,
had no authority to terminate the contract. nThrive asserts that it had this
authority because nThrive and MedAssets are the same entity and that only the
name of the entity had changed.”
A genuine issue of material fact exists on this issue, precluding the granting
of summary judgment. nThrive asserts that the merger did not change the
corporate structure of MedAssets and that the only change to this entity was in its
name, “regardless who (sic) MedAssets’ corporate parent happened to be at any
given time.”°°
TIBCO has presented a contrary view of the facts. According to TIBCO,
Pamplona’s purchase of MedAssets, Inc. and its subsidiaries, followed by a sale of
a portion of those subsidiaries to Vizient, then followed by a rebranding of a
remaining portion of those subsidiaries, is a more complex process than a name
>3 Because of the other factual issues surrounding the Termination Letter, the Court
need not reach the issue of whether TIBCO received proper notice of the
termination under the Services Agreement or common law.
4 Def.’s Opening Br. in Supp. of Mot. for Summ. J. 10.
°° Pj.’s Ans. Br. to Def.’s Mot. for Summ. J. 8-9.
© Def.’s Suppl. Br. at 6, n.4.
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change. The description of the transaction in the nThrive Order Form dated
November 4, 2016 appears to support this contention.*”
TIBCO asserts that the only way nThrive would have the authority to
terminate the contract “is if they become a party to the MedAssets Order Form.’*®
As discussed below, TIBCO’s position is that this could only occur if TIBCO
consented under § 21.5 or § 7.1, and nothing in the record shows that TIBCO
agreed.°? According to TIBCO, MedAssets was the only party that could terminate
the MedAssets Order Form.”
Viewing the facts alleged in a light most favorable to TIBCO, there is a
genuine dispute as to the nature of these corporate transactions as they relate to the
status of nThrive as either the same entity as or a new entity from MedAssets.
nThrive has failed to show a lack of dispute over the nature of these transactions
and its assertions that it is the same legal entity as MedAssets are not sufficient to
show entitlement to judgment in its favor.
Il. The MedAssets Order Form is ambiguous, thereby preventing
summary judgment.
Genuine disputes remain as to whether the triggering of either the
Extraordinary Corporate Event clause or the assignment clause would preclude
°7 Compl. Ex. B.
8 Oral Arg. Tr. at 37:1-3.
°° Oral Arg. Tr. at 37:3-6.
6° Oral Arg. Tr. at 33:16-18.
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nThrive from terminating the contract, as well as to the status of nThrive as a
separate entity or the same entity as MedAssets.
If the Extraordinary Corporate Event clause (§ 7.1) applies to the present
case, it would require “a written amendment” in order for the Agreement to apply
to the “additional users” in question.®’ The assignment provision (§ 21.5) prohibits
the assignment of any rights or obligations under the Agreement “without the prior
written consent of the other party,” and “[a]ny such attempted assignment shall be
void.”
TIBCO argues that the Extraordinary Corporate Event clause and the
assignments provision of the MedAssets Order Form and Services Agreement were
triggered by the MedAssets merger.® TIBCO also argues that, if the purchase by
Pamplona did not trigger the assignment or Extraordinary Corporate Event
provisions, then the “name change” did.™
nThrive asserts that TIBCO consented to nThrive taking over the MedAssets
Order Form when it entered into the nThrive Order Form.® According to nThrive,
TIBCO was aware that an unauthorized third party was using its software licenses
6! Compl. Ex. A § 7.1.
6 Compl. Ex. A § 21.5.
63 Oral Arg. Tr. at 27:4-9, 29:3-10; Wolcott Transmittal Aff. in Supp. of Pl.’s
Suppl. Br. Ex. D.
4 Oral Arg. Tr. at 35:3—5.
6 Oral Arg. Tr. at 3:1-10.
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and the nThrive Order Form was entered into in order to resolve that issue.°® On
the other hand, TIBCO asserts that the purpose of the nThrive Order Form was to
“memorialize” the business relationship between nThrive and TIBCO.*
nThrive, however, fails to address how TIBCO’s consent through the
nThrive Order Form, entered into on November 10, 2016, would apply
retroactively to nThrive’s purported termination of the MedAssets Order Form on
September 27, 2016. The nThrive Order Form also specifically states that the
Maintenance Fees under that contract are “in addition to the existing Maintenance
Fees that are due and payable for Software Licensed under previous agreements.”
In addition to the contractual ambiguity, a genuine issue of material fact
exists regarding the circumstances surrounding the purported termination letter on
September 27, 2016 and the parties’ actions as it relates to the contractual
provisions at issue. The termination letter itself is inconsistent with
communications between nThrive/MedAssets and TIBCO representatives during
that time, which indicate that MedAssets sought to assign its licenses to nThrive.°?
It also appears from the record that MedAssets knew as early as January 2016 that
it would need to amend the MedAssets Order form to reflect that Pamplona was a
66 Oral Arg. Tr. at 22—23:4.
67 Oral Arg. Tr. at 22:20—23:4.
68 Compl. Ex. B at 5.
6° Wolcott Transmittal Aff. in Supp. of Pl.’s Ans. Br. Ex. E.
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customer so that it could still access the software.”
Just days prior to the
termination letter, on September 23, 2016, TIBCO notified nThrive that it was
using its software improperly and that the software “has not been contractually
assigned following a sequence of extraordinary corporate events involving
[MedAssets] that resulted in the renamed entity of nThrive.”7!
It is not clear from the terms of the MedAssets Order Form, nor from the
record, how termination is to be treated in the context of the transaction that
occurred in this case. TIBCO’s reading of the provisions as prohibiting nThrive
from terminating the contract as a non-party not in compliance with the terms is a
reasonable interpretation of the Agreement. When a contract is silent on an issue
or there are multiple reasonable, yet conflicting, interpretations of a contract’s
terms, as is the case here, issues of interpretation cannot be resolved on summary
judgment and are left for the finder of fact to determine.”
Il. TIBCO’s reading of the contract would not lead to an absurd result.
nThrive argues that TIBCO’s reading of the contract to bind nThrive to
MedAssets’ responsibilities and obligations under the MedAssets Order Form
70 Aff. of Chad S. C. Stover in Supp. of Def. nThrive Revenue Systems, LLC’s
Suppl. Br. in Supp. of its Mot. for Summ. J. Ex. 15 at TIB0000069.
1 Wolcott Transmittal Aff. in Supp. of PI.’s Suppl. Br. Ex. G.
” Smartmatic Int’l Corp. v. Dominion Voting Sys. Int’l Corp., 2013 WL 1821608,
at *12 (Del. Ch. May 1, 2013) (citing Cooke v. Oolie, 2000 WL 710199, at *11
(Del. Ch. May 24, 2000)); Simon-Mills, 2017 WL 1191061 at *17, *19 (Del. Ch.
Mar. 30, 2017).
i
while simultaneously not providing nThrive with the authority to terminate the
contract leads to the “absurd” result of a limbo period where no party could
terminate the contract.” An “absurd” result from interpreting a contract is “one
that no reasonable person would have accepted when entering the contract.”
Central to this issue is the timing of nThrive’s purported termination of the
contract on September 27, 2016 and nThrive’s entry into a contract with TIBCO on
November 10, 2016, under which nThrive agreed to take over obligations under
the MedAssets Order Form. TIBCO’s argument is not that nThrive was
responsible for Silver Level Maintenance under the MedAssets Order Form on
September 27, 2016 when nThrive sent the Termination Letter, but rather that
nThrive later became responsible for Silver Level Maintenance after entering into
the nThrive Order Form.’”> nThrive would have been responsible only for its
“unauthorized” use of the license at the time of the Termination Letter, before
becoming responsible for continuing to purchase maintenance at the same level as
provided under the MedAssets Order Form.”© MedAssets would have had the
ability to terminate the contract and would have been responsible to pay for the
® Def.’s Suppl. Br., 8; Oral Arg. Tr. at 46:18-47:6.
4 Sterling Prop. Holdings Inc. v. New Castle Cty., 2013 WL 1821594, at *7 (Del.
Ch. Apr. 30, 2013) (quoting Osborn v. Kemp, 991 A.2d 1153, 1159-60 (Del.
2010)).
? Oral Arg. Tr. at 43:1-18.
76 Oral Arg. Tr. at 29:17—30:5.
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license “at that point” because MedAssets was still the contracting party and
licensee.””
This is not an “absurd” result of TIBCO’s interpretation of the terms of the
contract, but rather a reasonable one that demonstrates the ambiguity of the
contract as to how the relevant provisions interact with each other and how they
apply to the present case. As discussed above, issues of interpretation of an
ambiguous contract are issues of fact not to be resolved on summary judgment.”®
IV. nThrive’s new agency argument cannot be decided on this limited
summary judgment record.
Following limited discovery, nThrive included an additional argument based
on a theory of agency in its Supplemental Brief in Support of its Motion for
Summary Judgment.” nThrive asserts that, even if it did not have the authority to
terminate the MedAssets Order Form as a party to the contract, it had the authority
to do so as an agent of MedAssets.®?
A principal—agent relationship is created “when one party consents to have
another act on its behalf, with the principal controlling and directing the acts of the
7 Oral Arg. Tr. at 30:3-5; 43.
7 United Rentals, 937 A.2d at 830 (Del. Ch. 2007) (citing HIFN, Inc. v. Intel
Corp., 2007 WL 1309376, at *9 (Del. Ch. May 2, 2007)); GMG , 36 A.3d at783 (citing Eagle Indus., Inc., 702 A.2d at 1232; Solan, Pernicious Ambiguity, 79
Chi-Kent L.Rev. at 862 (2004); United Rentals, 937 A.2d at 841-
42 (Del. Ch. 2007)).
” Def.’s Suppl. Br., 8-9.
8° Def.’s Suppl. Br., 9.
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agent.”8! Questions of agency “turn on the facts of the individual case”®? and the
party asserting an agency relationship has the burden of proving such a relationship
exists.%
nThrive generally sets forth three theories of authority under an agency
relationship: (1) actual authority; (2) implied authority; and (3) apparent
authority.** Actual authority is that which a principal “expressly or implicitly
9985
grants to an agent. Apparent authority is that which, “though not actually
granted, the principal knowingly or negligently permits an agent to exercise, or
*86 Relevant to the concept of apparent
which he holds him out as possessing.
authority is the apparent relationship between a principal and agent, as opposed to
an actual relationship.®’
nThrive asserts that because TIBCO was negotiating with nThrive
employees and representatives, and because TIBCO had received the Termination
8! Fisher v. Townsends, Inc., 695 A.2d 53, 57 (Del. 1997) (quoting Sears Mortgage
Corp. v. Rose, 634 A.2d 74, 79 (N.J. 1993)).
82 Fisher, 695 A.2d at 61 (Del. 1997) (quoting Sussex County v. Morris, 610 A.2d
1354, 1360 (Del. 1992).
83 Patel v. Sunvest Realty Corp., 2018 WL 4961392, at *4 (citation omitted).
84 Def.’s Suppl. Br., 10-12.
85 Billops v. Magness Constr. Co., 391 A.2d 196, 197 (Del. 1978) (citing Lind v.
Schenley Indus., Inc., 278 F.2d 79 (3d Cir. 1960)).
86 B A.S.S. Group, 2009 WL 1743730, at *5 (quoting Albert v. Alex. Brown Memt.
Servs., Inc., 2005 WL 2130607, at *10) (Del. Ch. Aug. 26, 2005).
87 Billops, 391 A.2d at 198 (citing Finnegan v. Robino-Ladd Co., 354 A.2d 142(Del. Super. 1976)).
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Letter on nThrive letterhead, TIBCO knew that nThrive had the authority to
terminate the contract on behalf of MedAssets.** nThrive views the subsequent
nThrive Order Form as a confirmation of TIBCO’s understanding that nThrive was
acting on behalf of MedAssets.°*?
TIBCO’s responds that nThrive and MedAssets are two separate entities and
that it had to enter into a separate agreement with nThrive because it was an
unauthorized user.?? TIBCO was unaware of how nThrive received those assets,
which was why TIBCO sent the September 23, 2016 letter to nThrive.”!
nThrive’s letterhead on the Termination Letter and the negotiations between
TIBCO and nThrive representatives leading up to the nThrive Order Form are the
only facts asserted by nThrive in its Supplemental Brief to support its argument
that it had authority to act on behalf of MedAssets as an agent.” nThrive’s
assertion that it was acting as MedAssets’ agent presents an issue of fact that
cannot be resolved on this motion for summary judgment.”
88 Oral Arg. Tr. at 10:2-8.
89 Oral Arg. Tr. at 3:1—10.
°° Oral Arg. Tr. at 22:10-14, 25:1-3, 26:19-23.
"1 Oral Arg. Tr. at 44:13-19.
2 Def.’s Suppl. Br.
°3 See Billops, 391 A.2d 196; C & C Drywall Contractor, Inc. v. Frank Robino
Companies, LLC, 2013 WL 6113252 (Del. Super. Nov. 15, 2013); Wise v.
Dawson, 353 A.2d 207, 208-09 (Del. 1975); Morris v. Blake, 552 A.2d 844 (Del.
1988) (“Summary judgment will be denied where the agency question is critical to
the disposition of the case and where further exploration of the facts is
-21-
CONCLUSION
For the foregoing reasons, nThrive’s Motion for Summary Judgment is
DENIED. It is so ordered.
Mar AA—
J
ghan A. Adams, Judge
appropriate.” (citing Schagrin v. Wilmington Medical Center, Inc., 304 A.2d 61(Del. Super. 1973)); see B.A.S.S. Group, 2009 WL 1743730, at *5.
oy