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Spacecraft Builder Appeals Del. Ruling Upholding $4M Award in Contract Case

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Moon Express Inc. has appealed last month's ruling from a Delaware federal judge upholding a $4.1 million jury verdict against the Cape Canaveral, Florida-based builder of lunar landers for failing to pay the company that it hired to create software for a vehicle capable of transporting experiments from the International Space Station.

Moon Express said last week in court papers that it was challenging the Oct. 15 decision from U.S. Chief Judge Leonard P. Stark, which denied Moon Express' request for a new trial and awarded Houston-based engineering startup Intuitive Machines cash and equity in its one-time partner. A notice of appeal was filed Nov. 16 with the U.S. Court of Appeals for the Third Circuit, according to an online docket-tracking service.

Moon Express, which is headquartered at the Cape Canaveral Air Force Station in Florida, had hired Intuitive Machines in 2015 to write flight software and help build a terrestrial return vehicle for its commercial lunar transportation business.

The company sued the following, after the partnership broke down, alleging that Intuitive Machines had lied about its ability to meet its obligations under two contracts. Intuitive Machines countered that it had met its contractual duties and had only stopped work because Moon Express had failed to make agreed-upon payments.

Following a five-day trial, a Wilmington jury sided with Intuitive Machines, awarding damages of $1.25 million in cash and $2.25 million in Moon Express equity for breaches of one contract. The panel also awarded $732,000 on another contract that was at issue in the suit.

Moon Express moved for a new trial with respect to both contracts. The company claimed that the jury had overlooked evidence that Intuitive Machines had deliberately breached its obligations by refusing to deliver software that it had already developed, cancelling Moon Express’ obligation to provide a test vehicle to Intuitive Machines to perform a crucial “tethered test,” which would have triggered a payment under the one of the contracts.

However, Stark noted that Moon Express had taken the opposite position at trial, telling the jury that Intuitive Machines needed to perform the test on a test vehicle in order to get paid.

“Moon Express' post-trial about-face is striking,” Stark wrote in a 20-page memorandum order last month.

Stark said that the jury had heard testimony from Moon Express’ own CEO, Bob Richards, that the company had never provided a test vehicle and had no intention to, because it was contemplating a new vehicle design and had decided that a tethered test was no longer suitable for Intuitive Machines’ software.

“While the jury was not compelled to credit all of Intuitive Machines' evidence, it was free to do so,” Stark wrote. “In the court’s view, there was plainly enough evidence to support the jury’s finding.”

Stark’s ruling Monday also granted Intuitive Machine’s request for attorney fees and denied Moon Express’ request that the judgment be stayed pending Intuitive’s request to have the equity portion of the verdict converted to cash. Both sides are set to argue the motion early next year.

Moon Express, founded in 2010 by Richards and space entrepreneurs Naveen Jain and Barney Pell, was formed to compete for Google's Lunar X Prize, which seeks to spur innovation in private spaceflight. Ultimately, the company says it plans to scour the earth's surface for precious metals and other rare elements. It hopes to become the first private company to  land an unmanned probe on the moon and develop a continuing commercial robotic lunar transportation business to return materials to earth.

The case is captioned Moon Express v. Intuitive Machines.