Venture Group Enterprises, Inc. v. Vonage Business Inc.
- Ronnie Abrams
- 1:20-cv-04095
- U.S. District Court · Southern District of New York
- 4
In Venture Group Enterprises v. Vonage Business, Judge Abrams ordered supplemental briefing instead of deciding Vonage’s summary-judgment and expert-exclusion motions.
Venture Group Enterprises, Inc. and Vonage Business Inc.; the case was stayed and the parties were required to provide supplemental briefing before the court ruled on Vonage’s pending motions.
What happened
Venture Group Enterprises, Inc. v. Vonage Business Inc. concerns a contract under which Venture sold Vonage’s internet-based telephone services. Venture sued Vonage over the agreement, and Vonage filed counterclaims, including its own contract claim and fraud claim.
Vonage argued that Venture’s sub-agents made false statements to customers and that Venture hid those statements, allowing Vonage to end the agreement for cause. Venture responded that Vonage had learned about the statements, continued accepting performance, and therefore could not later choose termination as a remedy. The record also showed possible later breaches, but the parties had not fully addressed those events.
The court ordered the parties to submit additional briefing about whether Vonage properly ended the agreement and whether the election-of-remedies rule applied. The court also allowed possible revised factual statements and affidavits and stayed the case while the briefing occurred. Judge Ronnie Abrams did not decide the pending motions in this order.
The detailed version
- Venture Group Enterprises, Inc. v. Vonage Business Inc. · No. 1:20-cv-04095
- Ronnie Abrams
- Mar. 16, 2023
Background
Venture Group Enterprises, Inc. sued Vonage Business Inc., formerly known as Vonage Business Ltd., asserting breach of contract, breach of the duty of good faith and fair dealing, promissory estoppel, and quasi-contract. The dispute concerns a November 2015 Channel Partner Agreement under which Venture sold Vonage’s Voice over Internet Protocol services. Vonage asserted counterclaims for breach of contract and fraud. The court had previously dismissed Vonage’s other counterclaims, including civil racketeering claims, New York General Business Law claims, tortious interference, and unjust enrichment.
Pending Motions and the Parties’ Positions
Vonage moved for summary judgment—a ruling without a trial when the record shows no genuine dispute requiring a trial—on Venture’s contract claim and Vonage’s contract counterclaim. Vonage also moved to exclude the opinions and testimony of Ariel Collins. Vonage argued that Venture’s sub-agents made false and misleading statements to customers, that Venture intentionally concealed those statements from Vonage, and that this breached Section 8.2.1 of the agreement. Vonage maintained that it properly terminated the agreement for cause on August 2, 2019.
The parties did not dispute that Venture’s sub-agents made misrepresentations or that Venture concealed them from Vonage. Venture argued that the election-of-remedies doctrine barred Vonage’s position. Under the rule as described by the court, a party that knows of a breach and affirmatively continues performing and accepting the benefits of the contract may be treated as having chosen to continue the contract rather than terminate it for that breach.
Court’s Analysis
The court found evidence that Vonage knew about the customer misrepresentations before the date it claimed to have discovered a potentially widespread problem. In November 2018, Vonage personnel discussed examples of Venture accounts in which customers were allegedly told that Vonage had taken over another communications provider. Evidence also indicated that Vonage communicated its concerns to Venture in early 2019, required Venture to provide sales recordings, and continued accepting Venture’s performance under the agreement.
The court explained that continuing performance after one breach does not necessarily prevent termination based on later, separate breaches. The record contained evidence of additional breaches in spring and summer 2019. But the court found it unclear when Vonage learned about those later breaches, whether it continued performing after learning about them, when a spreadsheet listing alleged misrepresentations was created, and which Vonage representatives knew about the information. The parties had not briefed those issues.
Order
The court directed the parties to submit supplemental briefing on whether Vonage properly terminated the agreement based on Venture’s later breaches and whether the election-of-remedies defense otherwise applied. The court authorized the parties, if necessary, to submit revised Rule 56.1 statements and additional sworn affidavits. Vonage’s supplemental brief was due April 17, 2023; Venture’s response was due May 8, 2023; and Vonage’s reply, if any, was due May 15, 2023. The case was stayed while the supplemental briefing was completed. The order did not grant or deny Vonage’s pending motions.
Read the full 4-page opinion on CourtListener, the free public archive maintained by the Free Law Project.