The Tinder-focused lawsuit pitting former Extreme Venture Partners (EVP) founding partners Sundeep Madra and Amar Varma, as well as Social Capital CEO Chamath Palihapitiya against fellow EVP co-founders and partners Ray Sharma, Ken Teslia, and Imran Bashir, continues to roll through the courts.
“There is no duty owed by Seven Hills to the plaintiffs. Since no negligence claim can succeed in the absence of a duty being owed.”
Following a decision earlier this month that sided with Sharma, Teslia, and Bashir – with Madra, Varma, and Palihapitiya having to pay out $15.69 million USD in damages – a separate decision delivered Tuesday by the Court of Appeal for Ontario sided against the three partners. The Ontario Court of Appeal decision on Tuesday has denied an appeal by Extreme Venture Partners co-founders Sharma, Teslia, and Bashir (the plaintiffs) to seek damages for the valuation of Xtreme Labs.
Along with the larger lawsuit, the trio also looked to sue the law firm that conducted the valuation of Xtreme Labs, arguing negligence on the side of the firm, Seven Hills. In the same action that began in 2014, the plaintiffs argued that Seven Hills owed a duty to them and failed to discharge that duty, by failing to take reasonable care in its valuation of Xtreme Labs, which owned a stake in Tinder (more on that here).
Seven Hills looked to dismiss the claim, and in an October decision, the Superior Court of Justice dismissed the suit, siding with Seven Hills. The judge stated, “I conclude there is no duty owed by Seven Hills to the plaintiffs. Since no negligence claim can succeed in the absence of a duty being owed, this finding is sufficient to grant summary judgment in favour of Seven Hills.”
The plaintiffs appealed the decision, but Tuesday’s ruling sided with the original judge. It also stated that the plaintiffs now owe $10,000 to Madra, Varma, Palihapitiya (the defendants), as well as Seven Hills for the suit.
“We note as well that the appellants’ claims against the other defendants have now proceeded to trial and the appellants achieved what counsel described as complete success and the award of all damages, including punitive damages,” the ruling stated. “In these circumstances, it is not apparent to us that it would be appropriate to make an order that would require another trial.”
The recent decision comes as the larger case continues to role through the courts. After the May 14 decision that ruled Madra, Varma, Palihapitiya owed $15.69 million USD for conspiring to acquire Xtreme Labs at a discounted price, in addition to breaching contractual obligations, the defendants stated plans to appeal the decision. That appeal for the judgment could take up to a year to be heard.
BetaKit has reached out to both parties for comment on the case but had yet to hear back by the time of publication.