Richards Layton & Finger
 

Judge Davis Denies Motion for Judgment on the Pleadings

February 13, 2019

In SARN Energy LLC v. Tatra Defense Vehicle A.S., C.A. No. N17C-06-355 EMD CCLD (Oct. 31, 2018) (“SARN I”), Judge Davis denied a motion for judgment on the pleadings brought by plaintiff SARN Energy LLC. SARN sued Tatra Defence Vehicle a.s. for breach of contract arising out of a Defense Policy Analysis and Advisor Agreement (the “Agreement”). Under the Agreement, SARN was to facilitate the sale of 20 Pandur armored vehicles from Tatra to the Czech Republic. This sale ultimately occurred, and, under the Agreement, Tatra agreed to pay SARN $1 million. After numerous requests for payment, Tatra sent SARN a partial payment of $40,000 for services performed under the Agreement. SARN continued to request full payment. Three months later, Tatra requested documentation from SARN for tax purposes and stated that “Tatra does not dispute its payment obligations” under the Agreement. The present suit was brought by SARN two weeks after Tatra’s request for documentation.

After filing suit, SARN brought a motion for judgment on the pleadings under Delaware Superior Court Civil Rule 12(c). SARN argued that the pleadings established that SARN had met its obligations for payment under the Agreement and Tatra had wrongfully withheld payment. Tatra responded by asserting that payment was not due until Tatra received payment from the Czech Republic for the vehicles and SARN provided tax documentation to Tatra. Judge Davis denied the motion for judgment on the pleadings because the standard for Rule 12(c) motions is the same standard of review as Rule 12(b) motions. Judge Davis determined that an assessment on the merits of the claims was premature and some discovery was needed. The court noted, however, that eventual summary judgment would likely be appropriate since the issues concerned contract interpretation, but, without further discovery, there was a dispute of fact as to whether the contract had been breached and whether the purported contract itself was supported by consideration.

Analysis: This case shows how a motion to dismiss or judgment on the pleadings may be inappropriate even in cases where the sole issue hinges on contractual interpretation. Some discovery may still be required on contract formation issues and/or breach for the court to grant relief. Judge Davis found judgment on the pleadings under Rule 12(c) inappropriate given Delaware's liberal pleading standard.

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