BANEY Corp. v. AGILYSYS NV
| Decision Date | 28 March 2011 |
| Docket Number | Civil Action No. 10-cv-00683-AW |
| Parties | BANEY CORPORATION, Plaintiff, v. AGILYSYS NV, LCC, d/b/a AGILYSYS MD, INC. Defendant. |
| Court | U.S. District Court — District of Maryland |
OPINION TEXT STARTS HERE
Four motions are currently pending before the Court: (1) Defendant's motion to dismiss, Doc. Nos. 17, 29,1 (2) Plaintiff's motion to strike an exhibit attached to Defendant's reply brief or, in the alternative, to file a surreply, Doc. No. 35, (3) Defendant's motion for a preliminary injunction, Doc. No. 37, and (4) Defendant's motion for limited, expedited discovery, Doc. No. 38. The Court has reviewed the motion papers submitted by the Parties and finds that no hearing is necessary. See D. Md. Loc. R. 105(6) (2010). For the reasons that follow, the Court will grant in part and deny in part Defendant's motion to dismiss; grant Plaintiff's motion to file a surreply, but deny Plaintiffs motion to strike; deny Defendant's motion for a preliminary injunction; and deny Defendant's motion for limited expedited discovery.
The following facts are drawn from the Amended Complaint unless otherwise noted. Plaintiff Baney Corporation ("Baney") owns and operates hotels at 17 different locations. In 2005, Defendant Agilysys NV, LLC ("Agilysys"), through its corporate predecessor, offered to provide Baney with a computerized property-management system capable of servicing a multi-property client. At that time, Agilysys told Baney that "the software is looking great" and that it is "easy to use" and "PERFECT for a multi-property environment." Am. Compl. ¶ 8.
On or about September 20, 2006, Baney contracted with Agilysys to license the V1Net Property Management System ("V1Net System") at two of Baney's 17 hotel locations. See Doc. No. 29, Ex. A ("Contract 1"). On February 9, 2007, Baney signed a second contract that extended the V1Net System to all of Baney's other hotel locations. See Doc. No. 29, Ex. B ("Contract 2").
Plaintiff alleges that the V1Net System never functioned properly. "The various documented errors and problems experienced by Baney included, but were not limited to, critical glitches in accounts receivable, reservations, and other areas that were not handled in a timely manner, slow speed of the system impairing customer service, and security issues and breaches among multi-property access." Id. ¶ 15. Plaintiff argues that the version of the V1Net System installed at its hotel locations was actually a "beta test version" of the program, not a finished product, and that Agilysys concealed this fact from Baney. Id. ¶ 23.
Although Agilysys promised to "do everything we can to fix the bugs and improve the speed of the V1Net System," id. ¶ 16, Plaintiff claims that Agilysys never undertook serious efforts to repair the program. Indeed, Plaintiff contends that Agilysys "failed to act with diligence and in good faith and instead made the determination that the V1Net Property Management System would not continue to be one of its marketable products, and thus it was relegated to a low priority." Id. ¶ 17. Nonetheless, Plaintiff continues to use the V1Net System because it is still in the process of converting to a new property-management system. See Doc. No. 33-1 at 2 ().
Plaintiff filed the original Complaint in this action on March 19, 2010, seeking recovery in contract and tort. See Doc. No. 1. Defendant moved to dismiss under Rules 12(b)(6) and 12(d) of the Federal Rules of Civil Procedure. See Doc. No. 17. Plaintiff subsequently amended the Complaint, see Doc. No. 24, and Defendant renewed its motion to dismiss, see Doc. No. 29. After the briefing was completed on the renewed motion to dismiss, Plaintiff moved to strike (or to file a surreply in response to) one of the exhibits attached to Defendant's reply brief. See Doc. No. 35. Defendant filed a motion for a preliminary injunction to prevent Baney from continuing to use the V1Net System until the outcome of this litigation, see Doc. No. 37, and another motion seeking early discovery on matters relating to the requested preliminary injunction, see Doc. No. 38.
The Court will address each of the four pending motions, beginning with Defendant's motion to dismiss.
Defendant's motion to dismiss challenges all claims in the Amended Complaint. See Doc. No. 29. The nine counts of the Amended Complaint can be sorted into two categories. The first set of counts seeks recovery on the basis of contract. See Count I (requesting declaratory judgment on several issues of contract interpretation); Counts II-III (alleging breach of Contracts I and II); Count VI (seeking rescission of the contracts); Counts VII-VIII (alleging breach of implied warranties of merchantability and fitness for particular purpose); Count IX (alleging breach of express warranty). The claims in the other counts sound in tort. See Counts IV-V (alleging fraud and negligent misrepresentation).
The purpose of a motion to dismiss under Rule 12(b)(6) is "to test the sufficiency of [the] complaint." Edwards v. City of Goldsboro, 178 F.3d 231, 243 (4th Cir. 1999). Except in certain specified cases, the complaint need only satisfy the "simplified pleading standard" of Rule 8(a), Swierkiewicz v. Sorema N.A., 534 U.S. 506, 513 (2002), which requires a "short and plain statement of the claim showing that the pleader is entitled to relief," Fed. R. Civ. P. 8(a)(2).
In its determination, the Court must "accept the well-pleaded allegations of the complaint as true," Albright v. Oliver, 510 U.S. 266, 268 (1994), and "must construe factual allegations in the light most favorable to the plaintiff," Harrison v. Westinghouse Savannah River Co., 176 F.3d 776, 783 (4th Cir. 1999). The Court should not, however, accept unsupported legal allegations, Revene v. Charles Cnty. Comm'rs, 882 F.2d 870, 873 (4th Cir. 1989), "legal conclusion[s] couched as . . . factual allegation[s]," Papasan v. Allain, 478 U.S. 265, 286 (1986), or conclusory factual allegations devoid of any reference to actual events, United Black Firefighters of Norfolk v. Hirst, 604 F.2d 844, 847 (4th Cir. 1979).
When a motion to dismiss relies upon facts that are not included in or attached to the complaint, the Court must ordinarily convert it into a motion for summary judgment. See Fed. R. Civ. P. 12(d). Defendant indicated that the Court should treat its motion as a motion for summary judgment whenever it relies on the terms of the contracts, because the contracts were not attached to the Complaint. See Doc. No. 29-4 at 12. Plaintiff has not disputed this method for analyzing Defendant's motion, so the Court will follow the suggested course.
Summary judgment is only appropriate "if the pleadings, the discovery and disclosure materials on file, and any affidavits show that there is no genuine issue as to any material fact and that the movant is entitled to judgment as a matter of law." Fed. R. Civ. P. 56(c); see Celotex Corp. v. Catrett, 477 U.S. 317, 323-25 (1986). The Court must "draw all justifiable inferences in favor of the nonmoving party, including questions of credibility and of the weight to be accorded to particular evidence." Masson v. New Yorker Magazine, Inc., 501 U.S. 496, 520 (1991) (citing Anderson v. Liberty Lobby, Inc., 477 U.S. 242, 255 (1986)).
To defeat a motion for summary judgment, the nonmoving party must come forward with affidavits or other similar evidence to show that a genuine issue of material fact exists. See Matsushita Elec. Indus. Co. v. Zenith Radio Corp., 475 U.S. 574, 587 (1986). Although the Court should believe the evidence of the nonmoving party and draw all justifiable inferences in his or her favor, a party cannot create a genuine dispute of material fact "through mere speculation or the building of one inference upon another." See Beale v. Hardy, 769 F.2d 213, 214 (4th Cir. 1985). However, when a motion for summary judgment is filed prior to the completion of discovery (as is the case here), the nonmoving party's obligation is qualified by Rule 56(f), which "allows a summary judgment motion to be denied . . . if the nonmoving party has not had an opportunity to make full discovery." Celotex, 477 U.S. at 326.
Maryland law governs interpretation of the contracts at issue in this case. See Contract 1, § 3(5); Contract 2, § 3(5). The Uniform Computer Information Transactions Act ("UCITA") has been enacted by the Maryland legislature, see Md. Code. Ann., Com. L. § 22-101, et seq. ("MUCITA"), and both contracts are covered by its terms, see id. § 22-103(a) (). Maryland follows the objective theory of contract interpretation, which means that the Court must "determine from the language of the agreement itself what a reasonable person in the position of the parties would have meant at the time it was effectuated." Gen. Motors Acceptance Corp. v. Daniels, 492 A.2d 1306, 1310 (Md. 1985).
Although substantive questions of contract interpretation are governed by Maryland law, federal law defines the "allocation of functions between judge and jury" and the propriety of summary judgment. Archer Daniels Midland Co. v. Brunswick Cnty., N.C., 129 Fed. Appx. 16, 23 (4th Cir. Mar. 15, 2005). "The general rule is that the interpretation of a writing, such as a contract, is a matter of law for the court." Cunningham & Co., Inc. v. Consolidated Realty Mgmt., Inc., 803 F.2d 840, 842 (5th Cir.1986). However, once the Court has discerned the meaning of disputed contractual provisions, it is ordinarily for the jury to decide whether there has been a breach of the contract. See Dairy Queen, Inc. v. Wood, 369 U.S....
To continue reading
Request your trial