Armour Capital Mgmt. LP v. SS&C Techs., Inc.
| Decision Date | 11 September 2019 |
| Docket Number | No. 3:17-cv-00790 (JAM),3:17-cv-00790 (JAM) |
| Citation | 407 F.Supp.3d 98 |
| Court | U.S. District Court — District of Connecticut |
| Parties | ARMOUR CAPITAL MANAGEMENT LP, Plaintiff, v. SS&C TECHNOLOGIES, INC., Defendant. |
Allison Kernisky, Pro Hac Vice, Joseph J. Mamounas, Pro Hac Vice, Holland & Knight, Miami, FL, Christopher M. Cerrito, Holland & Knight LLP, Stamford, CT, for Plaintiff.
Kevin J. O'Connor, Pro Hac Vice, James Tuxbury, Hinckley Allen, & Snyder, LLP, Boston, MA, Alexa Talin Millinger, Jeffrey J. Mirman, Hinckley, Allen & Snyder, LLP, Hartford, CT, John F. Baughman, Nora Ahmed, Paul, Weiss, Rifkind, Wharton & Garrison, LLP, New York, NY, for Defendant.
ORDER GRANTING IN PART AND DENYING IN PART DEFENDANT'S MOTION FOR SUMMARY JUDGMENT
Plaintiff ARMOUR Capital Management LP (ACM) and defendant SS&C Technologies, Inc. (SS&C) are embroiled in litigation over the failed implementation of financial services software that SS&C sold to ACM. In this latest round of their battle, SS&C moves for summary judgment on all of ACM's claims. Although I will grant SS&C's motion as to ACM's breach of contract claim, I will deny the motion as to ACM's remaining claims.
ACM is a Florida-based registered investment advisor that focuses on mortgage-related securities. SS&C provides software and related services to the financial industry from its headquarters in Connecticut. I take the facts here from both parties' briefs and their Local Rule 56 statements of material fact.
The origins of the parties' dispute dates to early 2014. SS&C was by this time an established provider of financial services software, including the CAMRA software that it had developed in 1988. See Doc. #177-1 at 2-3 (¶¶ 3-4, 6). ACM was then a 19-employee mortgage real estate investment trust (REIT). See Doc. #177-1 at 25 (¶ 65). ACM managed assets for the similarly-titled ARMOUR Residential REIT, Inc. (ARR), as well as for JAVELIN Mortgage Investment Corporation (which was later purchased by ARR). Id. at 7 (¶ 16).
Although it had worked with some REITs in the past, SS&C announced in April 2014 that it would form a new group that would specialize in serving REITs. See Doc. #177-1 at 5 (¶ 13); Doc. #176-8 at 2. In May 2014, Jim Mountain, who held himself out as the CFO of both ARR and Javelin, contacted SS&C. Doc. #177-1 at 8 (¶ 21). He and his colleague Mark Gruber then met in June 2014 with SS&C representatives, including business development director Dennis Moore. Id. at 9 (¶¶ 22-23). At the meeting, SS&C presented a PowerPoint discussing various aspects of itself, its customers, and CAMRA, and Moore then followed up with Mountain and Gruber. Id. at 9-11 (¶¶ 23-31).
Discussions between SS&C and the ARMOUR entities continued that summer and fall, including several "proofs of concept" to demonstrate tests of CAMRA on ARR's data. Id. at 11-12 (¶ 32). In late August 2014, SS&C met with ACM to show a PowerPoint purporting to demonstrate the first proof of concept of the CAMRA system and to introduce ACM to several SS&C CAMRA staffers. Id. at 12-14 (¶¶ 34, 37). Included in that group of staffers was SS&C professional services team member Shiv Sivadas. Id. at 13 (¶ 34). SS&C then discussed further aspects of CAMRA implementation with ACM information technology staff in September 2014. Id. at 14 (¶ 38).
In mid-November 2014, SS&C provided ACM with a "Comprehensive Mortgage REIT Software and Operational Support Services Proposal," ibid. (¶ 39), which contained various details about the potential implementation of CAMRA, see id. at 14-15 (¶¶ 39-41); Doc. #176-29 at 10, 13. By December 2014, Moore emailed Mountain, Gruber, and their colleague Joanna Terry to alert them that he and SS&C's Jeff Fecteau had been working "to prepare an implementation estimate for transitioning ARMOUR to our CAMRA solution." Doc. #177-1 at 16 (¶ 43). Two days later, he sent ARR and ACM a "draft implementation budget," and SS&C then sent a revised proposal the following day. Id. at 16-17 (¶¶ 45-48). SS&C proposed a call with Mountain to discuss "what constitutes the ‘ordinary course of business.’ " Id. at 17-18 (¶ 50). The parties have argued about the nature, meaning, and import of the statements by SS&C throughout these negotiations.
ACM and SS&C finally concluded their negotiations and signed what they call the "Master Agreement" on December 19, 2014. Id. at 17 (¶ 51). The Master Agreement specifies certain limitations of consequence to this action, including the following clauses:
The Master Agreement had several attachments: Attachment B-1, which identified specific "Hosting, Process Automation and Data Management Services" that SS&C would provide; and "Work Request One," which identified specific "Initial Implementation Services." Id. at 19 (¶ 53). Work Request One noted that SS&C would provide services "in support of Client's implementation of the Software," and listed "Assumptions," including a "Project Duration of 4-6 months" and an "Applicable Rate" that SS&C would "provide an estimated 1,850 hours of support in relation to the services described ... at a rate of $225 per person per hour." Ibid. (¶ 54).
Alongside its relationship with SS&C, ACM also maintained a relationship with ARR and Javelin. ACM provided services to both ARR and Javelin under what it calls "Management Agreements," which state that "[ACM] is authorized to retain, for and on behalf of the REIT, the services of third parties." Id. at 20 (¶ 56). The agreements also provide that "costs and expenses related to the retention of third parties shall be the sole cost and expense of the REIT." Ibid. The Management Agreements required ARR and Javelin on a monthly basis to reimburse ACM for its payments to SS&C. Id. at 21 (¶ 59).
ARR's co-CEO, Jeff Zimmer, testified that he understood the arrangement between ARR and ACM to be that ARR would ultimately bear the costs of the contractual relationship with SS&C, including paying for all fees that ACM paid to SS&C. Id. at 21 (¶ 58). Although it is not contractually bound to do so, ACM claims that it "intends to repay Armour and Javelin the full amount of the reimbursements" to the extent that ACM recovers any damages from SS&C in this action. Id. at 20 (¶ 56).
The relationship between ACM and SS&C eventually deteriorated, with each party blaming the other for difficulties implementing CAMRA. ACM terminated the Master Agreement on May 1, 2017. Id. at 20 (¶ 55). ACM then sued SS&C, see Doc. #1, asserting claims for breach of contract, Doc. #35 at 16-17 (Count I), violation of the Connecticut Unfair Trade Practices Act (CUTPA), id. at 17-19 (Count II), intentional misrepresentation, id. at 19-20 (Count III), negligent misrepresentation, id. at 20-21 (Count IV), and rescission, id. at 21-22 (Count V).
Both parties have since engaged in highly spirited litigation. In March 2018, I dismissed ACM's claim for intentional misrepresentation, see ARMOUR Capital Mgmt. LP v. SS&C Techs., Inc. , 2018 WL 1368908, at *6 (D. Conn. 2018), significantly limited the basis for ACM's breach of contract claim, id. at *3-*5, allowed ACM's negligent misrepresentation claim to proceed on the basis of inducement to enter into the Master Agreement, id. at *6-*7, and allowed ACM's CUTPA and rescission claims to proceed on the basis of the negligent misrepresentation claim, id. at *7-*8. In the meantime, SS&C has filed several counterclaims, see Doc. #88, which I dismissed in part and which are not before the Court now. See ARMOUR Capital Mgmt. LP v. SS&C Techs., Inc. , 2019 WL 688308 (D. Conn. 2019). SS&C has now moved for summary judgment on ACM's remaining claims. Doc. #176.
The principles governing the Court's review of a motion for summary judgment are well established. Summary judgment may be granted only if "the movant shows that there is no genuine dispute as to any material fact and the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(a). The Court must view the facts in the light most favorable to the party who opposes the motion for summary judgment and then decide if those facts would be...
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