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Alltrista Plastics, LLC d/b/a Jarden Plastic Solutions v. Rockline Industries, Inc.
Citation: Not availableDocket: N12C-09-094 JRJ CCLD
Court: Superior Court of Delaware; January 17, 2017; Delaware; State Appellate Court
Original Court Document: View Document
Defendant Rockline Industries, Inc. has sought relief from a prior ruling regarding the 'Termination Fee' in the Supply Agreement between it and Plaintiff Alltrista Plastics, LLC d/b/a Jarden Plastic Solutions, asserting that the fee constitutes a liquidated damages provision capping Jarden's breach of contract recovery at $1.5 million. The Court previously ruled on April 8, 2016, that the Termination Fee had not been triggered, based on the agreement's terms and relevant correspondence, and did not allow for Rockline's claims. Rockline did not seek reargument but later filed a Motion for Reconsideration on October 12, 2016, arguing the Court overlooked crucial language in the Supply Agreement stating that the Termination Fee serves as liquidated damages for breaches. Notably, Rockline cited the Delaware Supreme Court's Brazen v. Bell Atlantic Corp. case for the first time, despite having knowledge of it during earlier proceedings. Following a teleconference on October 21, 2016, the Court instructed Rockline to re-file under Civil Rule 60(b), which it did, and a hearing for oral arguments occurred on November 16, 2016. The Court exercises its plenary power to vacate or modify judgments to ensure justice, deeming it unnecessary to decide on Rule 60(b) relief for Rockline. The relevant section of the Supply Agreement indicates that the Termination Fee is not a penalty but constitutes liquidated damages for Rockline's breach. Specifically, if Rockline terminates the agreement without cause, it must pay a fee based on the timing of the termination, starting at $1,500,000 if terminated before the end of the first year. The Court notes that parties disputed the settlement state during a prior oral argument, but it does not rely on the concept of inadvertence or excusable neglect for its decision. Citing the precedent set in Brazen, the Court clarifies that although the termination fee was previously analyzed as non-breach-related, it should now be treated as liquidated damages for breach. Consequently, the Court grants Rockline’s Motion for Relief from Order on Summary Judgment and vacates its prior ruling from April 8, 2016.