Endowment Research Group, LLC v. Wildcat Venture Partners, LLC, and Bill Ericson

IN THE COURT OF CHANCERY OF THE STATE OF DELAWARE

ENDOWMENT RESEARCH GROUP, )
LLC, )
)
Plaintiff, )
)
v. ) C.A. No. 2019-0627-KSJM
)
WILDCAT VENTURE PARTNERS, )
LLC, and BILL ERICSON, )
)
Defendants. )

MEMORANDUM OPINION

Date Submitted: December 18, 2020
Date Decided: March 5, 2021
John M. Seaman, E. Wade Houston, ABRAMS & BAYLISS LLP, Wilmington, DE;
William C. Price, Michael T. Zeller, QUINN EMANUEL URQUHART &
SULLIVAN, LLP, Los Angeles, CA; Counsel for Plaintiff Endowment Research
Group LLC.
Gregory P. Williams, Robert L. Burns, Megan E. O’Connor, RICHARDS,
LAYTON & FINGER, P.A, Wilmington, DE; Kathleen H. Goodhart, COOLEY
LLP, San Francisco, CA; Counsel for Defendants Wildcat Venture Partners, LLC,
and Bill Ericson.

McCORMICK, V.C.
 Plaintiff Endowment Research Group (“ERG”) is an investment consulting

firm that connects investor clients with fund managers. In mid-2018, Defendants

Wildcat Venture Partners, LLC (“Wildcat”) and its founding partner Bill Ericson

asked ERG for help finding investors for Wildcat’s funds and promised to pay ERG

a portion of the fees earned. ERG agreed, and Wildcat signed a non-disclosure

agreement (the “NDA”) protecting ERG’s confidential client information. ERG

then introduced Wildcat to ERG’s clients. In July 2019, Ericson revealed that

Wildcat never intended to pay for ERG’s services or abide by the NDA. ERG

brought this action against Wildcat to enforce the NDA and the oral agreement to

compensate ERG. ERG claims that Wildcat has breached and repudiated the

agreements or, in the alterative, never intended to adhere to them. ERG also asserts

claims of unjust enrichment and quantum meruit. The defendants have moved to

dismiss the complaint. They argue that the court lacks subject matter jurisdiction

and that ERG fails to state a claim. Ericson has also moved to dismiss for lack of

personal jurisdiction. This decision grants the motion as to Ericson but largely

denies the motion as to Wildcat.
I. FACTUAL BACKGROUND

The facts are drawn from the Verified Supplemented Complaint (the

“Supplemented Complaint”) and its exhibit.1

A. Wildcat Engages ERG.

ERG is an investment consulting firm that specializes in developing

relationships with successful fund managers to advise its investor clients how to

invest their assets. ERG describes its relationship with its clients as “invaluable.”2

It invests considerable time and expense into developing its client relationships and

maintains its client list as confidential. ERG’s clients control over one billion dollars

in assets. Investment firms frequently approach ERG to seek access to its clients.

Wildcat is a California-based venture capital investment firm co-founded,

managed, and operated by Ericson (with Wildcat, “Defendants”). In connection with

Wildcat, Ericson has created and operated numerous Delaware entities. Wildcat

charges its investors (1) a 2.5% management fee on all capital invested in Wildcat’s

funds and (2) a 20% “carry” fee on all gains made by the investments in its funds.

In July 2018, Wildcat reached out to and then met with ERG. At the meeting,

Wildcat explained that it “was raising a fund, and Wildcat would like ERG to help

1
C.A. No. 2019-0627-KSJM, Docket (“Dkt.”) 52, Verified Suppl. Compl. (“Suppl.
Compl.”).
2
Id. ¶¶ 1, 19, 65.

2
bring investors into the fund.”3 Wildcat and ERG reached an agreement “that if a

certain amount of assets were raised, Wildcat would share its fees with ERG.” 4

During an August 10, 2018 phone call with Ericson, an ERG representative

again explained “that if ERG and Wildcat were to work together, ERG would receive

a portion of the fees Wildcat generated from investments arising out of ERG’s

relationships with and recommendations to its investor clients.” 5 ERG alleges that

Ericson agreed to this compensation arrangement on behalf of Wildcat.

On August 13, 2018, ERG and Wildcat signed the NDA. The purpose of the

NDA was to ensure that ERG could confidentially share its client lists, contacts, and

relationships with Wildcat and to ensure that Wildcat would not use this information

for any purpose other than (1) evaluating the “potential business relationship”

between Wildcat and ERG, or (2) “as a client of ERG,” should Wildcat agree to be

ERG’s client.6 Section 1 of the NDA, entitled “Purpose,” states:

The parties wish to explore and evaluate a potential
business relationship of mutual interest in relation to
endowment-style investing for family offices (the
“Opportunity”), and in connection with the Opportunity,
each party has disclosed and may further disclose to the
other party confidential and business information and

3
Id. ¶ 17.
4
Id.
5
Id. ¶ 18.
6
Suppl. Compl. Ex. A (“NDA”) §§ 1, 3.

3
 trade secrets that both parties desire to treat as
confidential. 7

To accomplish this purpose, Section 3 of the NDA prohibited Wildcat from

disclosing or using ERG’s confidential client lists, contacts, or relationships “for any

purpose except to evaluate and engage in discussions concerning the Opportunity.”8

Section 1 defined “Opportunity” as “a potential business relationship of mutual

interest in relation to endowment-style investing for family offices” between Wildcat

and ERG.9 Section 3 also restricted Wildcat from disclosing or using ERG’s

confidential information by stating: “For the avoidance of doubt, Wildcat shall not

use any Confidential Information of ERG, including but not limited to the identity

of . . . Clients, for any purpose whatsoever, except to evaluate the Opportunity or as

a client of ERG.”10

7
Id. § 1.
8
Id. § 3.
9
Id. § 1.
10
Id. § 3.

4
 Wildcat and ERG agreed in Section 9 of the NDA that

breach or threatened breach of this Agreement will cause
irreparable injury to the other party and that money
damages will not provide an adequate remedy for such
breach or threatened breach, and both parties hereby agree
that, in the event of such a breach or threatened breach, the
non-breaching party will also be entitled, without the
requirement of posting a bond or other security, to
equitable relief, including injunctive relief and specific
performance. 11

After securing Wildcat’s oral agreement regarding the compensation

arrangement and obtaining the executed NDA, ERG went to work introducing its

clients to Wildcat. Over a twelve-month period, Wildcat asked ERG for its

assistance in making introductions, and ERG recommended and introduced Wildcat

to at least twenty-five of ERG’s investor clients, including: at least fifteen investors

controlling over $1 billion each; five investors controlling over $10 billion each; and

two investors controlling over $100 billion each. On multiple occasions, Ericson

expressed his appreciation of the service that ERG was providing.

In June 2019, Ericson emailed ERG: “At some point we should talk about

your business model and how to best make sure we are including you appropriately

without causing undue friction for you, us or the clients.”12

11
Id. § 9.
12
Suppl. Compl. ¶ 42.

5
 B. Wildcat Ceases Communications with ERG.

In July 2019, Wildcat cut off communication with ERG. Uncertain about this

development, ERG called to request updates on how Wildcat’s interactions with

ERG’s clients were progressing. Ericson responded by stating that “(1) Wildcat

never agreed to work with ERG, (2) Wildcat never agreed to split fees on investors

that were originated by ERG, and (3) ERG never provided any serious value in

helping Wildcat find investors and grow its business.” 13 Ericson denied entering

into a compensation agreement. Ericson also denied that the NDA was enforceable

and informed ERG that Wildcat intended to continue seeking and accepting

investments from ERG’s investor clients.

In November 2019, after ERG initiated this litigation, Wildcat used

connections that it made through ERG to hire a new partner—Ahmed Khaled Jawa,

an affiliate of Starling Group, a Dubai-based family office. ERG had recommended

Wildcat to Starling group in April 2019. Today, Jawa is one of five partners at

Wildcat.

According to ERG, Wildcat “has met with approximately half a dozen ERG

clients, which ERG introduced to Wildcat, to solicit investments” since ERG

initiated this litigation.14 Wildcat has used and is continuing to use ERG’s

13
Id. ¶ 46.
14
Id. ¶ 54.

6
confidential information to seek and accept investments from ERG’s investor

clients, which places ERG’s relationships with them at material risk. Wildcat refuses

to stop seeking investments from these clients and refuses to even communicate with

ERG about Wildcat’s interactions with ERG’s clients.

C. ERG Sues Wildcat.
ERG brought this action in August 2019, seeking a preliminary injunction and

damages. In December 2020, with leave of the court, Plaintiff supplemented the

complaint. The Supplemented Complaint contains five counts:

• Count I asserts a claim for specific performance against Wildcat for
breach of the NDA, seeking preliminary and permanent injunctions
“(1) forbidding Wildcat from seeking investments from, accepting
investments from, or contacting any of ERG’s investor clients whose
information ERG disclosed to Wildcat and (2) forbidding Wildcat from
using ERG’s investor client information for any purpose ‘except to
evaluate the [business relationship with ERG] or as a client of ERG’”;15

• Count II asserts a claim against Wildcat for breach of the oral
compensation agreement, seeking damages; 16

• Count III asserts a claim against Wildcat for unjust enrichment, seeking
that Wildcat “make immediate restitution” in the amount of “the full
profits it received as a result of its illicit conduct”; 17

• Count IV asserts a claim against Wildcat for quantum meruit, seeking
“the reasonable value of the (1) unpaid services and (2) confidential
client information”; 18

15
Suppl. Compl. ¶¶ 67, 55–67 (alteration in original).
16
Id. ¶¶ 68–75.
17
Id. ¶¶ 79, 76–79.
18
Id. ¶¶ 85, 80–85.

7
 • Count V asserts a claim against Wildcat and Ericson for common law
fraud, seeking damages. 19

Defendants moved to dismiss the complaint, and the motion was fully

briefed. 20 The court held oral argument on Defendants’ motion to dismiss in

December 2020.21

II. LEGAL ANALYSIS

Defendants have moved to dismiss all counts under Rule 12(b)(6) for failure

to state a claim, all counts under Rule 12(b)(1) for lack of subject matter jurisdiction,

and the count asserted against Ericson under Rule 12(b)(2) for lack of personal

jurisdiction. This decision first addresses Ericson’s Rule 12(b)(2) motion before

evaluating the arguments under Rules 12(b)(1) and 12(b)(6) as to Wildcat.

A. Personal Jurisdiction as to Ericson
“When a defendant moves to dismiss a complaint pursuant to Court of

Chancery Rule 12(b)(2), the plaintiff bears the burden of showing a basis for the

court’s exercise of jurisdiction over the defendant.”22 In ruling on a 12(b)(2) motion,

19
Id. ¶¶ 86–92.
20
Defendants moved to dismiss the complaint before Plaintiff supplemented the complaint,
and the parties rested on the prior briefing after the Supplemented Complaint was filed.
See Dkt. 44, Defs.’ Opening Br. in Supp. of Mot. to Dismiss (“Defs.’ Opening Br.”); Dkt.
26, Pl.’s Answering Br. in Opp’n to Defs.’ Mot. to Dismiss (“Pl.’s Answering Br.”); Dkt.
38, Defs.’ Reply Br. in Supp. of Mot. to Dismiss (“Defs.’ Reply Br.”).
21
See Dkt. 58, Transcript, December 18, 2020, Oral Arg. on Defs.’ Mot. to Dismiss, Held
via Zoom.
22
Ryan v. Gifford, 935 A.2d 258, 265 (Del. Ch. 2007) (citing Werner v. Mill Tech. Mgmt.,
L.P., 831 A.2d 318 (Del. Ch. 2003)).

8
this court may “consider the pleadings, affidavits, and any discovery of record.”23

“If, as here, no evidentiary hearing has been held, plaintiffs need only make a prima

facie showing of personal jurisdiction and ‘the record is construed in the light most

favorable to the plaintiff.’” 24

Generally, Delaware courts resolve questions of jurisdiction using a two-step

analysis, first determining “that service of process is authorized by statute,”25 and

next determining that the defendant had certain minimum contacts with Delaware

such that the exercise of personal jurisdiction “does not offend traditional notions of

fair play and substantial justice.” 26

To establish jurisdiction over Ericson, Plaintiff relies on 10 Del. C.

§ 3104(c)(1) and 6 Del. C. § 18-109.27 Plaintiff argues that Ericson has sufficient

minimum contacts with Delaware because: Ericson created two entities, after ERG

began introducing Wildcat to its clients, for the purpose of accepting the benefits of

Id. (citing Cornerstone Techs., LLC v. Conrad, 2003 WL 1787959, at *3 (Del. Ch.
23

Mar. 31, 2003)).
24
Id. (first citing Benerofe v. Cha, 1996 WL 535405, at *3 (Del. Ch. Sept. 12, 1996); and
then quoting Cornerstone, 2003 WL 1787959, at *3).
25
Id.
26
Matthew v. Fläkt Woods Gp. SA, 56 A.3d 1023, 1027 (Del. 2012) (quoting Int’l Shoe Co.
v. Washington, 326 U.S. 310, 316 (1945) (internal quotation marks omitted)).
27
Pl.’s Answering Br. at 44–48.

9
ERG’s efforts; Ericson negotiated the NDA and oral agreement through Wildcat;

and the NDA calls for Delaware law to govern disputes arising out of it. 28

1. Jurisdiction Under 10 Del. C. § 3104(c)(1)

Plaintiff argues that the court has jurisdiction over Ericson under 10 Del. C.

§ 3104(c)(1) because Ericson created and operated three Delaware entities to

facilitate the transactions out of which this dispute arises and Wildcat signed an NDA

that is governed by Delaware law. 29

Section 3104(c)(1) confers jurisdiction on this court over nonresidents “who

in person or through an agent . . . [t]ransacts any business or performs any character

of work or service in the State.” 30 “[O]wnership of a Delaware subsidiary does not,

without more, amount to the transaction of business under Delaware’s Long Arm

Statute.”31 Ownership of a Delaware subsidiary can, however, fall within

Section 3104(c)(1) if “the underlying cause of action arises from the creation and

operation of the Delaware subsidiary.” 32

28
Id. at 49–50.
29
Id. at 44.
30
10 Del. C. § 3104(c)(1).
31
AeroGlobal Cap. Mgmt., LLC v. Cirrus Indus., Inc., 871 A.2d 428, 439 (Del. 2005).
32
Id. at 439–40 (“This is the case where the foreign corporation created and operated the
Delaware subsidiary in a manner that would avail itself of the benefits and protections of
the laws of the State of Delaware.”); see also Papendick v. Bosch, 410 A.2d 148, 152–53
(Del. 1979) (holding that this court had jurisdiction where the defendant “came into the
State of Delaware to create . . . a subsidiary corporation for the purpose of implementing
[the] contract [at issue]”); LVI Gp. Invs., LLC v. NCM Gp. Hldgs., LLC, 2017 WL 3912632,
10
 Plaintiff relies on AeroGlobal Capital Management, LLC v. Cirrus Industries,

Inc., where a foreign bank created a Delaware subsidiary “for the express purpose

of facilitating an investment by [the defendant] in [the acquisition target].” 33 The

parties there had stipulated that the agreement at issue shall be governed by Delaware

law. 34 Focusing on those two facts, the court held that “the totality of the

circumstances show that [the foreign bank] engaged in sufficient conduct to

constitute transacting business in this State within the meaning of Delaware’s Long

Arm Statute.”35

The facts before the court are disintuighable from those in AeroGlobal. The

Delaware subsidiaries here were not created for the “express” purpose of carrying

out a particular transaction, and Ericson was not a party to the NDA containing a

Delaware choice of law provision (Wildcat was). Further, the one claim asserted

against Ericson arises out of the alleged oral agreement—not the NDA.

The totality of the circumstances show that Ericson has not engaged in

sufficient conduct to constitute transacting business in this State within the meaning

of Delaware’s Long Arm Statute.

at *5 (Del. Ch. Sept. 7, 2017) (“To confer jurisdiction, the transaction of business must
have a tight nexus to the cause of action and must form a source of the claim.” (internal
quotation marks omitted)).
33
AeroGlobal, 871 A.2d at 438.
34
Id.
35
See id. at 440.

11
 2. Jurisdiction Under 6 Del. C. § 18-109

Plaintiff argues that the court also has jurisdiction over Ericson under

6 Del. C. § 18-109 because “Ericson is Wildcat’s manager, and this dispute arises

out of Mr. Ericson’s actions in negotiating the NDA and oral compensation

agreement on behalf of Wildcat, a Delaware LLC.”36

Under Section 18-109, this court has jurisdiction over the manager of an LLC

“in all . . . proceedings brought in the State of Delaware involving or relating to the

business of the limited liability company.”37 An action “involves or relates” to the

business of an LLC if:

(1) the allegations against [the manager] focus centrally on
his rights, duties and obligations as a manager of a
Delaware LLC; (2) the resolution of this matter is
inextricably bound up in Delaware law; and (3) Delaware
has a strong interest in providing a forum for disputes
relating to the ability of managers of an LLC formed under
its law to properly discharge their respective managerial
functions. 38
This court has interpreted that provision to narrowly refer to corporate governance

and the internal affairs of an LLC.39

36
Pl.’s Answering Br. at 48.
37
6 Del. C. § 18-109(a).
38
Vichi v. Koninklijke Phillips Elecs. N.V., 2009 WL 4345724, at *8 (Del. Ch. Dec. 1,
2009) (alterations in original) (quoting Assist Stock Mgmt. LLC v. Rosheim, 753 A.2d 974,
981 (Del. Ch. 2000)).
39
See CLP Toxicology, 2020 WL 3564622, at *12 (indicating that “tort or contract claims
unconnected to the internal affairs or corporate governance” of an LLC do not fall within
the scope of Section 18-109); Hartsel v. Vanguard Gp., Inc., 2011 WL 2421003, at *9
12
 Plaintiff overstates the breadth of this court’s holding in CLP Toxicology,

arguing that it stands for the proposition that Section 18-109 applies “when the

claims alleged involve members’ actions in their official capacity negotiating

contracts on behalf of Delaware LLCs.”40 The CLP Toxicology court instead held

that Section 18-109 refers “to the internal affairs or corporate governance issues that

Delaware law is concerned with” and not to “tort or contract claims.”41 Because the

only claim brought against Ericson is for fraud in connection with an oral agreement

with a third party, it is not a corporate governance or internal affairs claim that would

ordinarily fall within the scope of Section 18-109. For that reason, Section 18-109

does not supply personal jurisdiction over Ericson. 42

3. Jurisdictional Discovery Is Not Warranted.
Plaintiff contends that, even if the court declines to rule that it has jurisdiction

over Ericson on the current record, it should deny the motion to dismiss without

prejudice and allow ERG to take jurisdictional discovery. 43

(Del. Ch. June 15, 2011) (holding that the court did not have personal jurisdiction because
the claims did not “involve or relate to [the LLC’s] business in the sense of its internal
business as required by the statute”), aff’d, 38 A.3d 1254 (Del. 2012).
40
See Pl.’s Answering Br. at 48 (citing CLP Toxicology, 2020 WL 3564622, at *12).
41
2020 WL 3564622, at *12.
42
Because the court finds that it does not have jurisdiction over Ericson under
Section 3104(c)(1) or Section 18-109, it need not undertake the minimum contacts
analysis.
43
Pl.’s Answering Br. at 43–44.

13
 This court may decide a motion to dismiss under Rule 12(b)(2) on the

pleadings and affidavits. 44 If the motion is decided on the pleadings and affidavits,

the plaintiff must “make a prima facie showing of personal jurisdiction.”45 “Only

where the facts alleged in the complaint make any claim of personal jurisdiction over

defendant frivolous, might the trial court, in the exercise of its discretionary control

over the discovery process, preclude reasonable discovery in aid of establishing

personal jurisdiction.” 46 That is to say, a plaintiff “cannot use jurisdictional

discovery to simply ‘fish for a possible basis for this court’s jurisdiction.’” 47

Plaintiff argues that “although Defendants have brought factual jurisdictional

arguments in their motion, ERG has been effectively denied its right to obtain

reasonable discovery prior to being required to mount proof against the same.” 48 But

Plaintiff “does not explain how discovery would provide the ‘something more’

44
Extell DV LLC v. Hemeyer, 2020 WL 1950503, at *4 (Del. Ch. Apr. 23, 2020); Ryan,
935 A.2d at 265; accord. Hart Hldg. Co. v. Drexel Burnham Lambert Inc., 593 A.2d 535,
539 (Del. Ch. 1991).
Hart, 593 A.2d at 539; accord. Fitzgerald v. Cantor, 1998 WL 842316, at *2 (Del. Ch.
45

Nov. 10, 1998).
46
Hart, 593 A.2d at 539.
47
CLP Toxicology, 2020 WL 3564622, at *15 (quoting In re Am. Int’l Gp., Inc., 965 A.2d
763, 816 n.195 (Del. Ch. 2009)).
48
Pl.’s Answering Br. at 43.

14
needed to establish personal jurisdiction.” 49 Nor does Plaintiff suggest that

jurisdictional discovery would amount to anything more than a fishing expedition.

Plaintiff has not made a prima facie showing for this court’s personal

jurisdiction over Ericson and therefore jurisdictional discovery is unwarranted.

Count V as asserted against Ericson is dismissed.

B. Subject Matter Jurisdiction
“As Delaware’s Constitutional court of equity, the Court of Chancery can

acquire subject matter jurisdiction over a cause in only three ways, namely, if:

(1) one or more of the plaintiff’s claims for relief is equitable in character, (2) the

plaintiff requests relief that is equitable in nature, or (3) subject matter jurisdiction

is conferred by statute.” 50

This case does not implicate the first or third bases for this court’s subject

matter jurisdiction. Plaintiff’s request for specific performance of the NDA is the

only potential basis for this court’s equitable jurisdiction. Wildcat argues that

Plaintiff’s request for specific performance of the NDA is insufficient to confer

subject matter jurisdiction because Plaintiff has an adequate remedy at law. 51

49
See CLP Toxicology, 2020 WL 3564622, at *15.
50
Candlewood Timber Gp., LLC v. Pan Am. Energy, LLC, 859 A.2d 989, 997 (Del. 2004)
(citing 10 Del. C. §§ 341–42).
51
Defs.’ Opening Br. at 13–18.

15
 “Although specific performance is an equitable remedy upon which equity

jurisdiction might be predicated, that is true only if the complaint, objectively

viewed, discloses a genuine need for such equitable relief.” 52 In order to prevent

plaintiffs from praying “for some type of traditional equitable relief as a kind of

formulaic ‘open sesame’ to the Court of Chancery” where a complete remedy

otherwise exists,53 the court “must look beyond the remedies nominally being

sought, and focus upon the allegations of the complaint in light of what the plaintiff

really seeks to gain.”54 The analysis requires a “realistic assessment of the nature of

the wrong alleged and the remedy available in order to determine whether a legal

remedy is available and fully adequate.”55 An adequate remedy at law is one that

will “afford the plaintiff full, fair, and complete relief.” 56 “The party seeking an

equitable remedy has the burden to show that a legal remedy would be inadequate.”57

52
Candlewood, 859 A.2d at 997.
53
Pitts v. City of Wilm., 2009 WL 1204492, at *5 (Del. Ch. Apr. 27, 2009) (quoting
Christiana Town Ctr. LLC v. New Castle Cnty., 2003 WL 21314499, at *3 (Del. Ch. June 6,
2003)).
54
Candlewood, 859 A.2d at 997 (citing Diebold Comput. Leasing, Inc. v. Com. Credit
Corp., 267 A.2d 586 (Del. 1970); Hughes Tool Co. v. Fawcett Publ’ns Inc., 297 A.2d 428
(Del. Ch. 1972), rev’d on other grounds, 315 A.2d 577 (Del. 1974)).
55
Id. (quoting McMahon v. New Castle Assocs., 532 A.2d 601, 603 (Del. Ch. 1987)).
56
El Paso Nat. Gas Co. v. TransAmerican Nat. Gas Corp., 669 A.2d 36, 39 (Del. 1995)
(quoting Hughes, 315 A.2d at 579).
Amaysing Techs. Corp. v. Cyberair Commc’ns, Inc., 2004 WL 1192602, at *2 (Del. Ch.
57

May 28, 2004).

16
 Breach of confidentiality and non-disclosure obligations lend themselves to

equitable remedies, and this court has routinely exercised subject matter jurisdiction

over such disputes.58 This case is no different. To meet its burden, ERG alleges that

“ERG’s relationships with its high net worth clients are unique and invaluable.”59

ERG’s business revolves around introducing managers to its exclusive clients; ERG

has invested considerable time, effort and expense, into developing these client

relationships, as the NDA confirms, and ERG takes concerted efforts to maintain the

secrecy of this information.60 ERG further alleges that by breaching the NDA,

Wildcat “is putting at material risk ERG’s client relationships by refusing even to

communicate with ERG about Wildcat’s interactions with those ERG clients.”61

58
See, e.g., 360 Campaign Consulting, LLC v. Diversity Comm’n, LLC, 2020 WL 1320909,
at *2–6 (Del. Ch. Mar. 20, 2020); AlixPartners, LLP v. Mori, 2019 WL 6327325, at *5–9
(Del. Ch. Nov. 26, 2019); Ritchie CT Opps, LLC v. Huizenga Managers Fund, LLC,
2019 WL 2319284, at *1, *8–9 (Del. Ch. May 30, 2019).
59
Suppl. Compl. ¶ 65; see id. ¶¶ 1, 3.
60
See Arkema Inc. v. Dow Chem. Co., 2010 WL 2334386, at *5 (Del. Ch. May 25, 2010)
(holding that damage to reputation among customers constituted irreparable harm).
Wildcat suggests that Plaintiff failed to provide “specific evidence that it would lose
customers,” Defs.’ Reply Br. at 4, but the Arkema court did not hold that specific evidence
is required to show irreparable harm. See 2010 WL 2334386, at *4–5. The court did,
however, emphasize that “it would be very difficult, if not impossible, to quantify the extent
of the likely harm to [the plaintiff’s] goodwill and reputation.” Id. at *5. As in Arkema, it
would be very difficult to quantify the extent of the harm to ERG’s goodwill and reputation
if Wildcat were to continue utilizing ERG’s confidential client information purportedly
protected by the NDA.
61
Suppl. Compl. ¶ 3.

17
These factors support an inference that equitable relief might be required to remedy

ERG’s claims of breach. 62

Two additional factors bolster this conclusion. First, ERG alleges that it will

be irreparably harmed absent the grant of specific performance because

“determining damages caused by Wildcat’s past and future breaches of the NDA

would be difficult to calculate,” and this allegation is reasonably conceivable.63

“[I]rreparable harm warranting injunctive relief is appropriate in cases where

damages would be difficult to assess,” and the inherent difficulty of assessing

damages for breaching the NDA shows irreparable harm exists here. 64 The value of

the confidential information would be difficult to quantify, and Plaintiff alleges that

the breach will continue indefinitely absent injunctive relief.65

62
Wildcat relies on Diebold to support the argument that “[h]ere, there is no ‘collision
course’—ERG alleges that the breach has already occurred—and ERG fails entirely to
explain how it has been or will be harmed by that breach.” See Defs.’ Opening Br. at 16–
17 (citing 267 A.2d at 590). Wildcat misapplies Diebold to the present case because the
“collision course” rationale there applied to a situation in which a breach of the contract
had not yet occurred. See 267 A.2d at 588–90. Here, ERG alleges that the breach has
already occurred and is ongoing. As discussed above, Plaintiff has pled facts that suggest
it has been and will continue to be harmed.
63
Suppl. Compl. ¶ 66.
64
Sealy Mattress Co. of N.J. v. Sealy, Inc., 532 A.2d 1324, 1341 (Del. Ch. 1987); see also
Mountain W. Series of Lockton Cos. v. Alliant Ins. Servs., 2019 WL 2536104, at *20
(Del. Ch. June 20, 2019) (identifying scenarios involving irreparable harm).
65
Wildcat cites to Alliance Compressors LLC v. Lennox Industries, Inc. and Athene Life
and Annuity Co. v. American General Life Insurance Co. as support, but those cases are
unpersuasive in the given context. See Defs.’ Opening Br. at 17–18 (citing 2020
WL 57897, at *1–3, 5 (Del. Ch. Jan. 6, 2020); 2019 WL 3451376, at *8 (Del. Ch. July 31,
2019)). In both of those cases, unlike here, the court found that money damages sufficed
18
 Second, Wildcat and ERG stipulated in the NDA that “[e]ach party

understands and agrees that its breach or threatened breach of this Agreement will

cause irreparable injury to the other party and that money damages will not provide

an adequate remedy for such breach or threatened breach.”66 The NDA further

provides that “in the event of such a breach or threatened breach, the non-breaching

party will . . . be entitled . . . to equitable relief, including injunctive relief and

specific performance.” 67 Although it is true that parties cannot confer subject matter

jurisdiction through contractual stipulation, 68 Delaware courts give some

presumptive weight to contractual stipulations of irreparable harm and typically

require that a party seeking to avoid the force of the stipulation demonstrate that “the

facts plainly do not warrant” such a finding. 69 Wildcat provides no compelling

reason to cast aside the parties’ bargain in this case.

and were readily calculable. See Alliance Compressors, 2020 WL 578997, at *5; Athene,
2019 WL 3451376, at *9.
66
NDA ¶ 9 (emphasis added); see also id. ¶ 3 (“Each party further acknowledges and
agrees that the disclosure of Confidential Information of the other party may cause
substantial and irreparable competitive harm . . . .”).
67
Id. ¶ 9.
68
See Defs.’ Opening Br. at 18–19 (citing Quarum v. Mitchell Int’l, Inc., 2019 WL 158153,
at *4 (Del. Ch. Jan. 10, 2019)).
69
See Horizon Pers. Commc’ns, Inc. v. Sprint Corp., 2006 WL 2337592, at *23–24
(Del. Ch. Aug. 4, 2006); see also Martin Marietta Materials, Inc. v. Vulcan Materials Co.,
68 A.3d 1208, 1226 (Del. 2012) (“Our courts have long held that contractual stipulations
as to irreparable harm alone suffice to establish that element for the purpose of issuing . . .
injunctive relief.” (internal quotation marks omitted) (ellipses in original)); Quarum,
2019 WL 158153, at *3 (“Although a contractual stipulation as to the irreparable nature of
19
 Accordingly, Plaintiff’s request for specific performance of the NDA gives

rise to this court’s subject matter jurisdiction. The clean-up doctrine supplies

jurisdiction as to the remaining claims.70 Wildcat’s motion to dismiss pursuant to

Rule 12(b)(1) is therefore denied.

C. Failure to State a Claim
“[T]he governing pleading standard in Delaware to survive a motion to

dismiss is reasonable ‘conceivability.’” 71 When considering a motion to dismiss

under Rule 12(b)(6), the court must “accept all well-pleaded factual allegations in

the [c]omplaint as true . . . , draw all reasonable inferences in favor of the plaintiff,

and deny the motion unless the plaintiff could not recover under any reasonably

conceivable set of circumstances susceptible of proof.” 72 The court, however, need

the harm that would result from a breach cannot limit this Court’s discretion to decline to
order injunctive relief, such a stipulation does allow the Court to make a finding of
irreparable harm provided the agreement containing the stipulation is otherwise
enforceable.”); Gildor v. Optical Sols., Inc., 2006 WL 4782348, at *11 (Del. Ch. June 5,
2006) (“Delaware courts do not lightly trump the freedom to contract and, in the absence
of some countervailing public policy interest, courts should respect the parties’ bargain.”).
70
See Darby Emerging Mkts. Fund, L.P. v. Ryan, 2013 WL 6401131, at *8 (Del. Ch.
Nov. 27, 2013) (“The existence of jurisdiction in this Court over even a single count . . . is
sufficient for the exercise of jurisdiction over the remaining counts under the cleanup
doctrine.” (ellipses in original) (quoting Duff v. Innovative Discovery LLC, 2012
WL 6096586, at *7 (Del. Ch. Dec. 7, 2012))).
71
Cent. Mortg. Co. v. Morgan Stanley Mortg. Cap. Hldgs. LLC, 27 A.3d 531, 537 (Del.
2011).
72
Id. at 536 (citing Savor, Inc. v. FMR Corp., 812 A.2d 894, 896–97 (Del. 2002)).

20
not “accept conclusory allegations unsupported by specific facts or . . . draw

unreasonable inferences in favor of the non-moving party.” 73

Wildcat seeks to dismiss each Count for failure to state a claim, arguing that:

the complaint fails to allege a breach of the NDA; the complaint fails to allege a

breach of the alleged oral agreement or a basis for the alleged damages, and the

alleged oral agreement is unenforceable; the unjust enrichment and quantum meruit

claims are barred by express contracts and by principals of restitution; and the fraud

claim fails to allege scienter for promissory fraud or reasonable reliance. 74

1. Breach of the NDA

Plaintiff contends that Wildcat breached Section 3 and Section 4 of the NDA

by using Plaintiff’s confidential information to seek and accept investments from

investors without keeping Plaintiff apprised of the discussions.75 Wildcat counters

that the Supplemented Complaint alleges only that Wildcat solicited ERG investors

without keeping ERG apprised of these discussions, and that such actions do not

constitute breach of the NDA.76

73
Price v. E.I. du Pont de Nemours Co., Inc., 26 A.3d 162, 166 (Del. 2011) (citing
Clinton v. Enter. Rent-A-Car Co., 977 A.2d 892, 895 (Del. 2009)), overruled on other
grounds by Ramsey v. Ga. S. Univ. Advanced Dev. Ctr., 189 A.3d 1255 (Del. 2018).
74
Defs.’ Opening Br. at 22–44.
75
Pl.’s Answering Br. at 14–18.
76
Defs.’ Reply Br. at 9–12.

21
 “When the contract is clear and unambiguous, we will give effect to the plain-

meaning of the contract’s terms and provisions, without resort to extrinsic

evidence.”77 “Delaware adheres to the ‘objective’ theory of contracts, i.e. a

contract’s construction should be that which would be understood by an objective,

reasonable third party.” 78 Further, the “general terms of the contract must yield to

more specific terms.”79

Wildcat relies on Section 3 of the NDA, under which “each party agree[d] not

to use any Confidential Information of the other party for any purpose except to

evaluate and engage in discussions concerning the Opportunity.” 80 It contends that

the exception permitted Wildcat to “evaluate the Opportunity” by engaging in direct

discussions with prospective investors. 81

Wildcat’s argument oversimplifies Plaintiff’s allegations. The Supplemented

Complaint alleges that Wildcat used ERG’s confidential information to cut ERG out

of the process.82 Such alleged conduct is inconsistent with the purpose of the NDA,

77
Sunline Com. Carriers, Inc. v. CITGO Petroleum Corp., 206 A.3d 836, 846 (Del. 2019)
(internal quotation marks omitted).
78
E.g., Osborn v. Kemp, 991 A.2d 1153, 1159 (Del. 2010).
79
Sunline Com. Carriers, 206 A.3d at 846.
80
NDA § 3.
81
Defs.’ Opening Br. at 25–26.
82
See Suppl. Compl. ¶ 45 (“[A]fter receiving the benefits of ERG’s protected confidential
information about, and relationships with, ERG’s world-class investor clients and ERG’s
services, Wildcat began cutting off meaningful communications with ERG.”); id. ¶ 49
(“Ericson stated Wildcat intended to continue seeking and accepting investments from
22
which was “to explore and evaluate a potential business relationship of mutual

interest in relation to endowment-style investing for family offices,” between ERG

and Wildcat.83 Such conduct is also inconsistent with the NDA’s definition of

“Opportunity,” which was something “of mutual interest” to ERG and Wildcat.84

The Supplemented Complaint therefore adequately states a claim for breach of the

NDA.

Because Plaintiff adequately alleges that Wildcat breached Section 3 of the

NDA, Plaintiff has also stated a claim for breach of Section 4, which provides that

“[e]ach party shall promptly notify the other party if it becomes aware of any

unauthorized use or disclosure of the Confidential Information in violation hereof.”85

Wildcat does not dispute that it failed to inform ERG of various communications

ERG’s investor clients . . . in violation of the explicit terms of the NDA.”); id. ¶ 50
(“Wildcat refused to discuss in good faith, let alone honor, its promises to compensate ERG
and refused otherwise to compensate ERG on a commercially reasonable basis for ERG’s
invaluable client information, client contacts and services.”); id. ¶¶ 52–53 (“In November
2019, after ERG initiated this litigation, Wildcat took advantage of connections that it made
through ERG to hire a new partner . . . . Wildcat therefore has used ERG’s protected client
and other proprietary information in violation of the NDA and without providing ERG with
any commercially reasonable compensation.”); id. ¶ 54 (“[S]ince ERG initiated this
litigation, Wildcat has met with approximately half a dozen ERG clients, which ERG
introduced to Wildcat, to solicit investments. . . . Because Wildcat has gone dark, however,
ERG has been unable to determine with certainty whether Wildcat has transacted with these
clients of ERG.”).
83
See NDA § 1 (emphasis added).
See id.; see also Suppl. Compl. ¶ 15 (“Krasnoff made it clear he was seeking to begin a
84

mutually beneficial business relationship. . . .” (emphasis added)).
85
NDA § 4.

23
with prospective clients. Because Plaintiff has pled facts from which the court can

infer that Wildcat was in “violation” of the NDA, it follows that Plaintiff has pled

facts from which the court can infer that Wildcat failed to notify ERG of this use or

disclosure.

Wildcat’s motion to dismiss Count I is denied.

2. Breach of the Oral Compensation Agreement

Wildcat argues that Count II must be dismissed because the alleged oral

agreement is unenforceable.86 Wildcat also argues that the complaint fails to state a

claim for breach of the alleged oral agreement because the complaint fails to allege

an actual breach of the alleged agreement or resulting damages.87

a. The Alleged Oral Agreement Is Enforceable.
Wildcat argues that the alleged oral agreement is unenforceable because it

lacks definiteness, violates the statute of frauds, and is illegal. None of these

arguments prevail at the pleading stage.

Wildcat first argues that the alleged oral agreement is indefinite because it

“says nothing about what particular fees, or what ‘portion’ of those fees Wildcat

purportedly agreed to pay ERG.” 88 Under Delaware law, contractual terms must be

86
Defs.’ Opening Br. at 28–37.
87
Id. at 26–28.
88
Id. at 28.

24
“sufficiently definite” for “a valid contract” to exist,89 but contractual terms are

sufficiently definite if they “provide a basis for determining the existence of a breach

and for giving an appropriate remedy.”90 At the pleading stage, a plaintiff need only

plead facts from which a court can infer the existence of definite terms. 91

Plaintiff adequately pleads facts from which the court can infer a definite

contract. The Supplemented Complaint alleges that, during an August 10, 2018

telephone call, “the parties discussed ERG’s compensation model,” and

“Mr. Ericson and Mr. Krasnoff understood, that if ERG and Wildcat were to work

together, ERG would receive a portion of the fees Wildcat generated from

investments arising out of ERG’s relationships with and recommendations to its

89
Eagle Force Hldgs., LLC v. Campbell, 187 A.3d 1209, 1212–13 (Del. 2018) (quoting
Osborn, 991 A.2d at 1158).
90
Id. at 1232 (“A contract is sufficiently definite and certain to be enforceable if the court
can—based upon the agreement’s terms and applying proper rules of construction and
principles of equity—ascertain what the parties have agreed to do.”); see also Iacono v.
Estate of Capano, 2020 WL 3495328, at *9 (Del. Ch. June 29, 2020) (“A contract must
contain all material terms to be enforceable. ‘What terms are material is determined on a
case-by-case basis, depending on the subject matter of the agreement and on the
contemporaneous evidence of what terms the parties considered essential.’” (citation
omitted) (quoting Eagle Force, 187 A.3d at 1230)); Jackson v. Nocks, 2018 WL 1935961,
at *6 (Del. Ch. Apr. 24, 2018) (“In a claim for specific performance, all essential terms of
the agreement must be sufficiently definite to establish an enforceable contract.” (internal
quotation marks omitted)).
91
See VLIW Tech., LLC v. Hewlett-Packard Co., 840 A.2d 606, 611 (Del. 2003) (“[A]
plaintiff need not plead specific facts to state an actionable claim. Rather, a complaint for
breach of contract is sufficient if it contains ‘a short and plain statement of the claim
showing that the pleader is entitled to relief.’” (quoting Ct. Ch. R. 8(a)(1))).

25
investor clients.” 92 Although Plaintiff does not allege the specific amount of the fees

or the intervals at which they will be paid, the court can infer the existence of such

an agreement from these allegations. These allegations constitute fair notice of the

alleged oral agreement by pleading facts that suggest the parties agreed on a fee

structure. 93

Wildcat next argues that that the alleged oral agreement is invalid under the

statute of frauds because it cannot be performed in under one year. 94 “It has been

the law in Delaware for many years that the Statute of Frauds does not apply to a

contract which may, by any possibility, be performed within a year.”95 “That is, if

92
Suppl. Compl. ¶ 18.
93
See VLIW Tech., 840 A.2d at 611 (“Such a statement must only give the defendant fair
notice of a claim and is to be liberally construed.”); see also In re Gen. Motors (Hughes)
S’holder Litig., 897 A.2d 162, 168 (Del. 2006) (requiring “specific supporting factual
allegations” to overcome a motion to dismiss and permitting the court to accept as true
“reasonable inferences that logically flow from the face of the complaint”). Wildcat
contends that “[t]he agreement says nothing about what particular fees, or what ‘portion’
of those fees Wildcat purportedly agreed to pay ERG.” Defs.’ Opening Br. at 29. Wildcat
cites Litle v. Waters to support its argument, but that case is inapposite. See Defs.’ Reply
Br. at 15–16 (citing 1992 WL 25758, at *5–6 (Del. Ch. Feb. 11, 1992)). There, the court
held that “the agreement has no provisions as to how much will be paid, how it will be
paid, when it will be paid and to whom it will be paid.” Litle, 1992 WL 25758, at *6.
Plaintiff, however, has pled facts suggesting that the parties communicated via telephone
and agreed upon a compensation model for the agreement. Based on the well-pled facts, a
reasonable person could infer that the alleged oral agreement contained provisions detailing
the fee structure.
94
Defs.’ Opening Br. at 30–32.
95
Haveg Corp. v. Guyer, 211 A. 2d 910, 912 (Del. 1965).

26
a contract may be performed within a year, the statute does not apply.”96 The

Supplemented Complaint acknowledges that “the lifecycle of a venture capital fund

may be ten years or more,”97 but it is possible that the duration of this particular

Wildcat fund could have been less than one year. Plaintiff has therefore pled facts

indicating that the alleged oral agreement is not subject to the statute of frauds.

Wildcat also argues that the alleged fee demands made by ERG violate federal

securities law because ERG acted as a “broker” despite not being a registered broker-

dealer.98 Illegal contracts are unenforceable under Delaware law,99 and it is unlawful

under Section 15(a) of the Exchange Act “for any broker or dealer . . . to effect any

transactions in, or to induce or attempt to induce the purchase or sale of, any security

. . . unless such broker or dealer is registered” as such with the SEC. 100 Plaintiff does

not dispute that ERG is not a registered broker-dealer. Instead, Plaintiff argues that

96
Brandner v. Del. State Hous. Auth., 605 A.2d 1, 1 (Del. Ch. 1991).
97
Suppl. Compl. ¶ 66 (emphasis added).
98
Defs.’ Opening Br. at 32–37.
99
See, e.g., Della Corp. v. Diamond, 210 A.2d 847, 849 (Del. 1965); AB Stable VIII LLC v.
Maps Hotels and Resorts One LLC, 2020 WL 7024929, at *80 (Del. Ch. Nov. 30, 2020);
Bunting v. Citizens Fin. Gp., Inc., 2007 WL 2122137, at *5 (Del. Super. June 29, 2007).
Federal securities law is in accord. See 15 U.S.C. § 78cc(b) (“Every contract made in
violation of any provision of this chapter or of any rule or regulation thereunder . . . shall
be void . . . .”).
100
15 U.S.C. § 78o(a)(1); see also id. § 78o(b) (outlining the way in which a broker or
dealer may register).

27
ERG did not act as a “broker” as that term is defined in the Exchange Act and

construed by federal precedent. 101

The Exchange Act defines a “broker” as “any person engaged in the business

of effecting transactions in securities for the account of others.” 102 “‘Merely

bringing together the parties to transactions, even those involving the purchase and

sale of securities, is not enough’ to warrant broker registration under Section

15(a).”103 Under the “finder’s exception,” finders are allowed to “perform a narrow

scope of activities without triggering the b[r]oker/dealer registration

requirements.”104 “The distinction drawn between the broker and the finder or

middleman is that the latter bring[s] the parties together with no involvement on [his]

part in negotiating the price or any of the other terms of the transaction.”105 Finders

101
See Pl.’s Answering Br. at 28–31.
102
15 U.S.C. § 78c(a)(4)(A); see also SEC v. Martino, 255 F. Supp. 2d 268, 283 (S.D.N.Y.
2003) (holding that a person is a broker if their conduct is “characterized by a certain
regularity of participation in securities transactions at key points in the chain of
distribution” (internal quotation marks omitted)).
103
SEC v. Kramer, 778 F. Supp. 2d 1320, 1329–41 (M.D. Fla. 2011) (quoting Apex Glob.
P’rs, Inc. v. Kaye/Bassman Int’l Corp., 2009 WL 2777869, at *3 (N.D. Tex. Aug. 31,
2009)); accord. Maiden Lane P’rs, LLC v. Perseus Realty P’rs, G.P. II, LLC, 2011
WL 2342734, at *4 (Mass. Super. Ct. May 27, 2011).
104
Kramer, 778 F. Supp. 2d at 1336 (alteration in original).
105
Maiden Lane, 2011 WL 2342734, at *4 (alterations in original) (internal quotation
marks omitted); see Found. Ventures, LLC v. F2G, Ltd., 2010 WL 3187294, at *6
(S.D.N.Y. Aug. 11, 2010) (“[A] finder finds potential buyers or sellers, stimulates their
interest, and brings parties together, while a broker brings the parties to an agreement on
particular terms.” (alteration in original) (quoting Jones v. Whelan, 2002 WL 485729, at *7
(S.D.N.Y. Mar. 29, 2002))).

28
may even “facilitat[e] securities transactions among other persons,” as doing so does

not amount to “effecting transactions in securities for the account of others.” 106

Although transaction-based compensation is one of the “hallmarks” of a

broker, “this is by no means dispositive.” 107 For a person to be deemed a broker as

opposed to a finder, “[t]he evidence must . . . show involvement at key points in the

chain of distribution, such as participating in the negotiation, analyzing the issuer’s

financial needs, discussing the details of the transaction, and recommending an

investment.”108 Conversely, when a person is neither entrusted with investment

assets for nor “authorized to transact for the account of others,” these factors indicate

the person is not a “broker.”109

ERG’s minimal involvement in the underlying transactions of Wildcat’s fund

makes it reasonably conceivable that ERG was a “finder” and not a “broker” under

the Exchange Act. ERG’s business involves connecting its clients with successful

fund managers and advising its clients regarding how to allocate their capital

between those fund managers. Once ERG’s clients invest in those funds, the

management of that capital is at the sole discretion of the fund manager (in this case,

SEC v. M & A W., Inc., 2005 WL 1514101, at *9 (N.D. Cal. June 20, 2005) (emphasis
106

omitted).
107
Maiden Lane, 2011 WL 2342734, at *4.
108
Id. (internal quotation marks omitted).
109
M & A W., 2005 WL 1514101, at *9 (internal quotation marks omitted).

29
Wildcat). It is reasonably conceivable that ERG does not “effect[] transactions in

securities for the account”110 of its clients nor “discuss[] the details of [those]

transactions.” 111 It is reasonably conceivable that ERG limits its activities to

“facilitating securities transactions among” its clients and Wildcat so as to be a

“finder.” 112 It is therefore reasonably conceivable that the alleged oral agreement

does not violate federal securities law.113

b. The Supplemented Complaint Alleges an Actual
Breach of the Oral Agreement and Damages.
Wildcat contends that the Supplemented Complaint fails to allege that Wildcat

has generated any fees from ERG clients and therefore fails to allege a breach of the

agreement or a basis for damages. 114

To state a claim for breach of contract, a plaintiff “must demonstrate: first,

the existence of the contract, whether express or implied; second, the breach of an

obligation imposed by that contract; and third, the resultant damage to the

110
Id.
111
See Maiden Lane, 2011 WL 2342734, at *4.
See M & A W., 2005 WL 1514101, at *3, *9–10 (holding that a party was not a broker);
112

Maiden Lane, 2011 WL 2342734, at *1, *4–6 (declining to hold that a finder was a broker).
113
Plaintiff also argues that, even if the court finds that ERG is a “broker” under the
securities laws, Wildcat has failed to show that ERG does not fall within one of the
exceptions enumerated in Section 78o(a)(1). See Pl.’s Answering Br. at 32–35. Because
Plaintiff has pled facts from which the court can reasonably infer that ERG was not a
“broker” with respect to the alleged oral agreement, the court need not address Plaintiff’s
“exceptions” argument.
114
Defs.’ Opening Br. at 26–28.

30
plaintiff.”115 “A plaintiff must properly allege each of these elements, even where

the plaintiff is seeking an equitable remedy such as specific performance.” 116

As alleged in the Supplemented Complaint, “ERG and Wildcat agreed that

ERG would receive a portion of the fees Wildcat generated from investments arising

out of ERG’s relationships with and recommendations to its investor clients.” 117 The

Supplemented Complaint also details Wildcat’s fee structure, from which ERG’s

proportional fees would be derived: “(1) a 2.5% management fee on all money

invested in Wildcat’s funds and (2) a 20% ‘carry’ fee on all gains made by the

investments in its funds.”118 Plaintiff alleges that Wildcat “breached the terms of the

August 10, 2018 agreement by seeking and accepting investments arising out of

ERG’s relationships with and recommendations to its investor clients, while refusing

to pay ERG any commercially reasonable compensation for its confidential

information or services.”119

Kuroda v. SPJS Hldgs., L.L.C., 971 A.2d 872, 883 (Del. Ch. 2009) (quoting VLIW Tech.,
115

840 A.2d at 612).
116
Id.
117
Supp. Compl. ¶ 69.
118
Id. ¶ 66.
119
Id. ¶ 74; see also id. ¶ 49 (“Ericson stated Wildcat intended to continue seeking and
accepting investments from ERG’s investor clients, without honoring the August 10, 2018
compensation agreement.”); id. ¶ 61 (alleging that Wildcat used “ERG’s confidential
information to seek and accept investments from ERG’s investor clients”); id. ¶ 63
(“[T]here is a reasonable apprehension that Wildcat will continue to commit future wrongs
as it has stated it will continue using ERG’s confidential client information to seek and
accept investments from ERG’s clients . . . .”); id. ¶ 83 (“ERG . . . provided Wildcat with
31
 Plaintiff’s allegations are sufficient to support a claim that Wildcat breached

the oral agreement by accepting investments without paying ERG a portion of its

fees.120 Damages could be calculated based on the amount of capital invested in

Wildcat funds by these ERG clients and the contractually agreed upon portion of

Wildcat’s fees to which ERG would be entitled.

its confidential client information, which Wildcat has used to seek and accept investments
from ERG’s investor clients. It was the expectation that ERG would be reasonably
compensated for providing Wildcat this information.”). Wildcat argues that Plaintiff has
failed to allege that Wildcat has “earned any fees from any ERG client,” Defs.’ Opening
Br. at 27, but considering Wildcat employs a 2.5% management on all of its managed
capital, the court can reasonably infer that Wildcat has earned fees.
120
Plaintiff also argues that Wildcat breached the implied covenant of good faith and fair
dealing by concealing its contacts with ERG’s investor clients. Pl.’s Answering Br. at 19–
21. Plaintiff, however, did not “give the opposing party notice of [this] claim” in its
Supplemented Complaint. See, e.g., In re Gen. Motors, 897 A.2d at 168; Cent. Mortg., 27
A.3d at 535. The Supplemented Complaint does not raise the implied covenant as a distinct
claim or otherwise indicate that an implied term forms the basis for its breach of contract
claim. Because Plaintiff did not raise this issue until it responded to Wildcat’s motion to
dismiss, the court cannot consider it. See Dunn v. FastMed Urgent Care, P.C., 2019
WL 4131010, at *7 n.59 (“[Plaintiff] did not attempt to meet the implied covenant’s intent
requirement until his Opposition. His brief cannot patch pleading deficiencies.”); see also
Akrout v. Jarkoy, 2018 WL 3361401, at *3 n.23 (Del. Ch. July 10, 2018) (“Plaintiff’s
counsel’s post hoc attempt to clarify the allegations in the Complaint in response to a
motion to dismiss, while understandable given the paucity of the Complaint, cannot be
received as a supplement or amendment to the pleading itself.”); Orman v. Cullman, 794
A.2d 5, 28 n.59 (Del. Ch. 2002) (“[Plaintiff] improperly attempts to expand the scope of
his complaint in his brief opposing the motion to dismiss . . . . At this stage of litigation,
the Court is only permitted to consider the well-pleaded facts contained in the complaint
and any documents incorporated by reference into that complaint . . . . Briefs relating to a
motion to dismiss are not part of the record and any attempt contained within such
documents to plead new facts or expand those contained in the complaint will not be
considered.”).

32
 Because the alleged oral agreement is enforceable and the Supplemented

Complaint alleges an actual breach and damages, Wildcat’s motion to dismiss Count

II is denied.

3. Unjust Enrichment and Quantum Meruit

Wildcat argues that Plaintiff’s unjust enrichment and quantum meruit claims

fail because the Supplemented Complaint alleges that express contracts govern the

relationships between the parties.121

“The elements of unjust enrichment are: (1) an enrichment, (2) an

impoverishment, (3) a relation between the enrichment and impoverishment, (4) the

absence of justification, and (5) the absence of a remedy provided by law.”122

Similarly, a claim for quantum meruit permits “a party to recover the reasonable

value of his or her services if: (i) the party performed the services with the

expectation that the recipient would pay for them; and (ii) the recipient should have

known that the party expected to be paid.” 123 Where an express contract controls,

this court will generally dismiss claims for unjust enrichment and quantum meruit.124

121
Defs.’ Opening Br. at 37–38. Wildcat argues in the alternative that the unjust
enrichment and quantum meruit claims would fail because (1) ERG has not alleged that
any of its clients invested in a Wildcat fund and (2) the alleged oral contract is illegal and
unenforceable under the federal securities laws. Defs.’ Opening Br. at 39–40. As the court
held supra Section II.C.1, both of those contentions are incorrect.
122
Nemec v. Shrader, 991 A.2d 1120, 1130 (Del. 2010).
123
Petrosky v. Peterson, 859 A.2d 77, 79 (Del. 2004).
124
See Kuroda, 971 A.2d at 891 (“A claim for unjust enrichment is not available if there is
a contract that governs the relationship between parties that gives rise to the unjust
33
But where, as here, “doubt exists surrounding the existence of a contract,” this court

will allow the plaintiff to pursue “[these] claim[s] in the alternative . . . provided the

requisite elements are adequately pleaded.” 125

Wildcat argues that Plaintiff is precluded from pleading unjust enrichment and

quantum meruit because the alleged wrongdoing is expressly governed by the NDA

and the oral agreement.126 As Wildcat concedes, the NDA “makes no provision for

compensation to ERG.” 127 Instead, as the well-pled allegations of the Supplemented

Complaint contend, that aspect of the parties’ relationship was governed by an oral

agreement. Those allegations are sufficiently well pled to survive a motion to

dismiss, but Plaintiff has not yet proven (and may never prove) the existence of an

enrichment claim.”); Albert v. Alex Brown Mgmt. Servs, Inc., 2005 WL 2130607, at *8
(Del. Ch. Aug. 26, 2005) (“Courts generally dismiss claims for quantum meruit on the
pleadings when it is clear from the face of the complaint that there exists an express contract
that controls.”).
125
See Boulden v. Albiorix, Inc., 2013 WL 396254, at *14 (Del. Ch. Jan. 31, 2013); see also
Ct. Ch. R. 8(e)(2) (“A party may set forth 2 or more statements of a claim . . . alternately
or hypothetically . . . . When 2 or more statements are made in the alternative and 1 of
them if made independently would be sufficient, the pleading is not made insufficient by
the insufficiency of 1 or more of the alternative statements.”). Wildcat cites Doberstein v.
G–P Industries, Inc. for the proposition that “[t]o survive a 12(b)(6) motion, a plaintiff
must at a minimum identify a ‘factual basis for [its] unjust enrichment claim independent
of the allegations relating to [its] breach of contract claim.’” Defs.’ Reply Br. at 23
(alterations in original) (quoting 2015 WL 6606484, at *6 (Del. Ch. Oct. 30, 2015)). But
that quote is misleading. In Doberstein, the parties entered an express contract, which the
defendants did not dispute. 2015 WL 6606484, at *1, 3. The court was not presented with
a situation in which the existence of the contract was disputed, see id., so Doberstein is
inapposite.
126
Defs.’ Opening Br. at 37–38.
127
Id. at 38.

34
oral agreement. For that reason, Plaintiff’s unjust enrichment and quantum meruit

claims may, at the pleading stage, proceed in the alterative to Plaintiff’s claim for

breach of the alleged oral agreement.

Plaintiff alleges that Wildcat was unjustly enriched by “(1) its use of ERG’s

confidential client information to seek and accept investments from ERG’s investor

clients and (2) its receipt of ERG’s introduction and recommendation services for

almost 12 months without providing any commercially reasonable compensation for

them.” 128 As a direct result, ERG alleges that it was impoverished “by means of lost

exclusivity of its proprietary client information and lost time and effort spent

introducing and recommending Wildcat to ERG’s clients.”129 Wildcat’s use of

ERG’s client information lacks justification, such that “[e]quity and fairness”

suggest that Wildcat cannot retain the resulting benefits without properly

compensating ERG. 130 Plaintiff has also pled a lack of adequate remedy at law.131

Accordingly, Plaintiff has pled a claim for unjust enrichment.

128
Suppl. Compl. ¶ 77.
129
Id. ¶ 78.
130
See id. ¶ 79; see also Jackson Nat’l Life Ins. Co. v. Kennedy, 741 A.2d 377, 394
(Del. Ch. 1999) (indicating that a party cannot “justifiably” retain the benefits resulting
from a transaction if it is not “in accordance with the fundamental principles of justice or
equity and good conscience” (internal quotation marks omitted)).
131
See Suppl. Compl. ¶ 67 (“ERG has no adequate remedy at law . . . .”); id. ¶ 76 (“ERG
repeats and re-alleges the allegations set forth above as if set forth herein.”).

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 Plaintiff also alleges that it “provided services to Wildcat from August 2018

through July 2019” and that “ERG also provided Wildcat with its confidential client

information, which Wildcat has used to seek and accept investments from ERG’s

investor clients.” 132 In providing those services and that information, “[i]t was the

expectation that ERG would be reasonably compensated.”133 It is reasonable to infer

that Wildcat should have known that ERG expected to be paid, considering ERG’s

business consists of providing such services and information in exchange for

compensation. Accordingly, Plaintiff has pled a claim for quantum meruit.

Wildcat’s motion to dismiss Counts III and IV is denied.

4. Fraud
Wildcat argues that Plaintiff’s promissory fraud claim fails because Plaintiff

pleads no specific facts suggesting that Wildcat intended not to perform, and, even

if Plaintiff does plead such facts, its claim would still fail because ERG “cannot have

reasonably relied on an alleged oral promise to pay it illegal compensation.”134

Having already held that Plaintiff has presented facts from which the court can infer

the alleged oral agreement was not illegal, the court focuses on the first of Wildcat’s

two arguments.

132
Id. ¶¶ 81, 83.
133
Id.
134
Defs.’ Opening Br. at 42.

36
 “In order for a fraud claim to survive a motion to dismiss, a plaintiff needs to

allege: (1) that a defendant made a false representation, usually one of fact; (2) with

the knowledge or belief that the representation was false, or with reckless

indifference to the truth; (3) with an intent to induce the plaintiff to act or refrain

from acting; (4) that plaintiff’s action or inaction was taken in justifiable reliance

upon the representation; and (5) damage to the plaintiff as a result of her reliance on

the representation.”135

Pursuant to Court of Chancery Rule 9(b): “In all averments of fraud or

mistake, the circumstances constituting fraud or mistake shall be stated with

particularity. Malice, intent, knowledge and other condition of mind of a person

may be averred generally.”136 “[T]o state a claim for promissory fraud, a plaintiff

must plead something more than a promise, mere nonperformance, justifiable

reliance, damages, and a general averment of a culpable state of mind.”137 To assert

a claim for promissory fraud, “the plaintiff also must plead specific facts that lead to

135
Grunstein v. Silva, 2009 WL 4698541, at *12 (Del. Ch. Dec. 8, 2009) (citing Gaffin v.
Teledyne, Inc., 611 A.2d 467, 472 (Del. 1992)); accord. Browne v. Robb, 583 A.2d 949,
955 (Del. 1990); Stephenson v. Capano Dev., Inc., 462 A.2d 1069, 1074 (Del. 1983).
136
Ct. Ch. R. 9(b); see also Bamford v. Penfold, L.P., 2020 WL 967942, at *11–13
(Del. Ch. Feb. 28, 2020) (holding that, in the non-promissory fraud context, a complaint
need only “put defendants on notice of the misconduct with which they are charged and
protect defendants against false charges of immoral or fraudulent behavior”).
Winner Acceptance Corp. v. Return on Cap. Corp., 2008 WL 5352063, at *10 (Del. Ch.
137

Dec. 23, 2008).

37
a reasonable inference that the promissor had no intention of performing at the time

the promise was made.” 138

Wildcat contends that the Supplemented Complaint’s allegations fall short of

the heightened pleading standard for promissory fraud because it “fails to allege a

single specific fact that could support any inference regarding . . . Wildcat’s intent

at the time . . . the parties allegedly entered into an oral agreement.” 139

Plaintiff counters that the Supplemented Complaint does plead specific facts,

in particular pointing to the following allegations:

• Wildcat failed to perform the oral agreement;

• Wildcat “repudiated the oral compensation agreement on July 20, 2019,
less than a year after making it, and less than one month after
reaffirming the oral agreement via email”; 140

• Wildcat’s “repudiation came immediately after Wildcat reaped major
benefits from the oral agreement on a trip to the Middle East during
which, in Mr. Ericson’s words, Wildcat ‘inundate[d]’ ERG with
requests for investor contacts, and as a result of ERG’s introductions,
Wildcat was able to ‘keep[ them]selves very busy’”; 141

• Wildcat “continued to assure ERG the oral compensation agreement
was in place . . . as late as June 26, 2019, [when] Mr. Ericson sent ERG
an email regarding the logistics of how Wildcat would pay ERG and
reaffirming the oral agreement.” 142

138
Id.
139
Defs.’ Opening Br. at 43.
140
See Pl.’s Answering Br. at 40 (citing Compl. ¶ 46–47).
141
See id. (alterations in original) (quoting Compl. ¶¶ 40, 43).
142
See id. (citing Compl. ¶ 42).

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None of these alleged facts speak to Wildcat’s intent not to perform at the time the

alleged oral agreement was made. 143 If anything, they suggest that Wildcat intended

to perform at the time the alleged oral contract was made but subsequently changed

course. For example, Plaintiff acknowledges that Wildcat “continued to assure ERG

the oral compensation agreement was in place” nearly one year after the alleged oral

contract was made.144 Plaintiff must “plead something more than a promise, mere

nonperformance, justifiable reliance, damages, and a general averment of a culpable

state of mind,”145 but Plaintiff has failed to do so.

Wildcat’s motion to dismiss Count V is granted.

III. CONCLUSION
Ericson’s motion to dismiss for lack of personal jurisdiction is GRANTED.

Wildcat’s motion to dismiss is GRANTED as to Count V and is otherwise DENIED.

143
The only alleged facts regarding Wildcat’s intent at the time of the alleged oral
agreement are found in Paragraph 18 of the Supplemented Complaint, and they are
insufficient to meet the pleading standard.
144
Pl.’s Answering Br. at 40.
145
See Winner Acceptance, 2008 WL 5352063, at *10.

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